NEW YORK — A national jewelry retailer that allegedly tricked active-duty servicemembers into buying overpriced, poor quality jewelry at high interest rates has agreed to reimburse thousands of customers and cease operating under terms of a settlement filed Wednesday in a lawsuit by 18 states and the Federal Trade Commission.
Harris Jewelry agreed to stop collecting more than $21 million in outstanding debt from more than 13,000 servicemembers nationwide, and to refund more than $12 million to more than 46,000 servicemembers who paid for lifetime protection plans, according to New York Attorney General Letitia James, the lead plaintiff among the state attorneys general.
The company also agreed to pay a total of $1 million to the 18 states.
“Today’s action will help thousands of servicemembers get back on their feet after falling victim to Harris Jewelry’s schemes,” James said in a statement.
The retailer, based in Hauppauge, New York, operated stores on or near military bases around the country. The company allegedly used predatory lending practices and charged as much as 10 times the wholesale cost for jewelry.
At times, the company charged as much as $349 for a protection plan for the jewelry without disclosing it, according to James. Customers reported stones falling out, chains breaking and the finish on the jewelry fading.
According to Idaho Attorney General Lawrence Wasden, 107 Idaho servicemembers will benefit from the settlement. Wasden said the servicemembers will receive around $59,700 in restitution and/or debt forgiveness.
Harris also allegedly lured customers by asserting the lending contracts would improve their credit scores, when in actuality the credit offered was based on how much time was left on a servicemember's enlistment and what type of merchandise they purchased.
In a statement Wednesday, the company noted it had neither admitted nor denied these allegations and had resolved the matter in the best interests of its stakeholders. It touted its 60-plus years of serving military personnel and their families and said it “had been an honor to enable members of the military community to recognize the important people in their lives, as well as to help them celebrate birthdays, anniversaries, engagements, and other special occasions.”
The states joining New York in the lawsuit were: California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana, Maryland, Nevada, North Carolina, Pennsylvania, Virginia and Washington.
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