Troops and Vets Are Running Out of Time to Recoup Cash from Jewelry Swindler

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Sales associate arranges a display of diamond rings.
Sales associate arranges a display of diamond rings. (U.S. Army photo by Arthur Mondale)

A coalition of 18 state attorneys general is urging veterans and service members scammed by a jewelry dealer to recoup money lost to what the Federal Trade Commission called "illegal financing and sales tactics."

Harris Jewelry, a seller that hawked gems, rings and trinkets at post exchanges across the country on military bases, agreed to pay $34.2 million last summer for "deceptively" adding costly protection plans to service members' purchases and claiming that financing their jewelry would raise the credit scores of troops and their families, according to the Federal Trade Commission.

Now, a group of state-level Department of Justice officials -- some of whom represent states with large military bases -- is encouraging veterans and service members to get their money back before an April 15 deadline, and reminding them that any outstanding debt owed to Harris "is now $0."

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"Harris Jewelry was well-known in military towns due to salespersons attracting service members with teddy bears dressed in military uniforms, and also for sale of items like the Mom's Medal of Honor," said a statement shared with Military.com by North Carolina’s Attorney General Office.

"Due to a court settlement, many Harris Jewelry consumers from 2014 to present are likely eligible for a refund of some money," the statement continued.

Harris Jewelry agreed to close down as part of its FTC settlement. An attorney for the North Carolina Attorney General’s Office told Military.com a version of the statement was shared by the coalition across affected states.

The coalition estimates that more than 47,000 consumers are eligible for recoupment from either Harris Jewelry or its finance company, Consumer Adjustment Corp. Only 10,836 -- roughly 23% of affected consumers -- have filed a claim thus far, according to a statement from the New York Attorney General’s Office -- a statistic that state lawyers find concerning as the looming spring deadline approaches.

"Service members have historically been targeted with abusive business practices, in large part because of their steady paychecks, frequent moves, and the extra pressure to maintain financial solidity for military readiness," a statement from the Office of the New York State Attorney General said. "Harris is the latest in a series of cases brought by states attorneys general and federal consumer agencies to fight back against predatory businesses targeting soldiers. It is critical to take the profit out of deceiving those who serve our country."

The states listed in the coalition are California, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Louisiana, Maryland, Nevada, New York, North Carolina, Pennsylvania, Virginia, Washington and Hawaii.

Harris Jewelry's website, which once boasted of "exceptional customer service" for military personnel and their families, has been repurposed as an information and refund application pit stop. Attorneys in the coalition are urging service members and family members to file a claim -- for "up to $1,000+" -- there, even if they are unsure about their eligibility.

The lawyer from the North Carolina Attorney General’s office said that funds from the July 2022 settlement, $10.9 million of which is for the deceptive purchase protection plans, according to the FTC, have been earmarked for service members affected by the scam.

"If you purchased during that time period, go ahead and file a claim," the attorney said during a Tuesday phone call, adding that many consumers may have had warranties unknowingly added to their purchases.

A statement from the New York office said that if funds are not recouped by the April 15, 2023, deadline, money marked as "overpayments" will go to individual state unclaimed funds. But any unclaimed refunds will go back to the defendants of the settlement -- Harris Jewelry and its financers.

The settlement with Harris revolved around violations of the Military Lending Act, a law meant to protect troops and their families against exploitative sales practices.

According to the FTC, Harris Jewelry told service members that financing jewelry through its outlet would raise their credit scores; the regulatory entity also said the jeweler misrepresented warranties.

"In several instances, the company offered items for sale and gave the false impression that the protection plan was not optional or was required to finance the purchase, when it was in fact optional," the FTC said in a statement last year.

The stores also did not provide written disclosures in its advertisements -- and oral disclosures during the time of purchase -- that fully explained the purchase contract to the federal standard.

Among other requirements outlined in the settlement, Harris Jewelry was ordered to stop collecting millions in outstanding consumer debt, provide refunds, contact consumer reporting agencies to request a cessation of negative credit reports leveled against affected consumers, and shut down completely once those requirements are met.

The statement from the attorneys general urged consumers to contact their state law enforcement agencies if a negative credit judgment was taken against them.

According to the complaint, Harris Jewelry also violated the FTC Act, the Truth in Lending Act, and the Electronic Fund Transfer Act -- other federal regulations that offer additional consumer protections.

In 2021, service members, veterans and their family members accounted for nearly 4% of all fraud, identity theft and other scams reported to the FTC -- a rising statistic that has resulted in hundreds of millions in losses in the last five years.

-- Drew F. Lawrence can be reached at drew.lawrence@military.com. Follow him on Twitter @df_lawrence.

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