Jewelery company terminated following military scam
TOPEKA, Kan. (WIBW) – A nationwide jewelry business has come to an end following a years-long scam against service members that left many in debt.
On Tuesday, July 26, Kansas Attorney General Derek Schmidt said the Sunflower State had reached a settlement on behalf of more than 1,300 Kansans — mostly military and veterans — who had been defrauded by national jewelry retailer Harris Jewelry.
AG Schmidt said Kansas joined 17 other states and the Federal Trade Commission in recovering $34.2 million for more than 46,000 service members and veterans nationwide.
Schmidt said the New York-based jewelry company used deceptive marketing practices to lure active-duty service members into their financing program through false claims that investing in the program would improve their credit scores.
Instead, the AG said the military was tricked into getting high-interest loans on overpriced, shoddy jewelry, leaving them thousands of dollars in debt and damaged credit ratings.
Schmidt said the company operates retail stores near and on military bases across the country, including in Manhattan near Fort Riley. However, the Kansas location closed during the investigation.
Court documents show Harris Jewelry will stop collecting $293,857.03 still owed and reimburse $342,905.58 for protection plan fees to approximately 1,350 Kansans — the vast majority of whom are military personnel or their families. The company is also required to fix poor consumer credit ratings and dissolve all of its businesses.
According to the AG, Harris Jewelry’s business model was intended to target and serve the military. He said a previous multi-state investigation found local service members were lured into retail stores through a market program called “Operation Teddy Bear” where the store advertised bears in stuffed animal in military uniforms with the promise of charitable donations.
Schmidt said during the previous investigation that investigators discovered that no legal contract was signed between Harris Jewelers and the charity he claimed to support and that customers often gave conflicting information about the amount donated to charity.
The AG said the company used the charity connection as a marketing tactic to lure the military into costly and deceptive in-house financing deals for overpriced jewelry, which included contracts with hidden fees and payments directly tied to military salaries.
The documents alleged that the company violated the Kansas Consumer Protection Act, the FTC Act, the Truth in Lending Act, the Electronic Funds Transfer Act, the Military Loans Act, the Rule of owner and other state laws relating to the sale and financing of jewelry. to members of the military.
Schmidt said those who entered into a predatory finance loan with Harris Jewelry between January 2014 and July 2022 will be eligible for restitution to the extent they paid the collateral. He said an independent monitor will be installed to oversee rescues and contact consumers. Eligible customers will receive an email and a letter by post notifying them of the agreement and their eligibility, they will then have to claim their return.
To read a full copy of the judgment, click HERE.
Copyright 2022 WIBW. All rights reserved.