N.Y. Attorney General files suit against major jewelry retailer for targeting active duty U.S. military service members with fraudulent practices

New York’s Attorney General has filed a major lawsuit against Harris Jewelry for engaging in false and deceptive practices and illegal lending in the financing of jewelry sales to active duty servicemembers.  The company has retail stores near and on military bases around the country and the AG says they marked up jewelry between 600 and 1,000% over wholesale and then added 14.99% interest. As we allege, Harris Jewelry used servicemembers as pawns in a predatory scheme,” said Attorney General Underwood. “My office will not tolerate companies that seek to take advantage of New Yorkers in order to line their own pockets.”

The lawsuit also alleges that It is alleged that Harris Jewelry targets and then entices local servicemembers into the stores with “Operation Teddy Bear”— a purported charitable program in which Harris Jewelry sells teddy bears in military uniforms with promises of charitable donations. In fact, the complaint alleges that this is nothing more than a marketing ploy to dupe servicemembers into high-priced, illegal in-house financing contracts for vastly overpriced jewelry.

Making matters worse, Harris sells lines of military-themed jewelry and other commemorative items, such as the “Mother’s Medal of Honor,” “Token of Pride Coin,” and “Forever as One Dog Tag Necklace,” on credit it provides under the name Consumer Adjustment Corp. USA.  However, the Consumer Adjustment Corp. is merely the alter ego of Harris Originals of NY, Inc., which, the AG says was never clearly disclosed to the consumer and is used to finance more than 90% of its sales. The complaint further alleges that Harris Jewelry tells servicemembers it can provide them with an opportunity to build or improve their credit score through “The Harris Program”— the company’s own financing. Only after the servicemember agrees to participate in this “credit-improving program” does Harris Jewelry begin to discuss jewelry or its other products with the servicemember in an effort to max out the credit limit.

Operation Troop Aid Inc., the original charitable partner in Operation Teddy Bear, voluntarily dissolved and were assessed a suspended penalty earlier this year in a settlement with the New York Attorney General and other states, resolving potential charges of improper charitable co-venture activities, failures to account for donations and distribution of funds, and other deceptive practices.

The multistate investigation is being conducted by lead states New York and Tennessee, executive committee states Nevada and North Carolina, and participating states Delaware, Georgia, Hawaii, Idaho, Illinois, Kansas, Louisiana, Maryland, Pennsylvania, and Virginia.