State Sues Harris Jewelry For Illegal Business Practices - WWNY TV 7
A jewelry store at Watertown's Salmon Run Mall is accused of preying on soldiers and duping them into illegal contracts for "vastly overpriced jewelry."
Attorney General Barbara Underwood Monday that her office is suing Harris Jewelry. The suit claims the store engages in false and deceptive acts and illegal lending in the financing of jewelry sales to active-duty service members.
The lawsuit is the result of an ongoing multi-state investigation co-led by New York and Tennessee.
“As we allege, Harris Jewelry used service members as pawns in a predatory scheme,” said Underwood. “My office will not tolerate companies that seek to take advantage of New Yorkers in order to line their own pockets.”
The lawsuit charges that Harris Jewelry allegedly engages in unfair, abusive, false, and deceptive acts and practices, deceptive credit repair services, and illegal lending in the financing of jewelry sales to active-duty service members.
The company, headquartered in Hauppauge, New York , has retail stores near, and in some cases on, military bases around the country, including Fort Drum.
It's alleged that Harris Jewelry targets and then entices local service members 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. The complaint alleges that this is nothing more than a marketing ploy to dupe service members into high-priced, illegal in-house financing contracts for vastly overpriced jewelry.
Harris Jewelry 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.
The AG's Office says Consumer Adjustment Corp. is merely the alter ego of Harris Originals of NY, Inc., a relationship that, the Attorney General alleges, is never clearly disclosed to the consumer and is used to finance more than 90 percent of its sales.
The complaint further alleges that Harris Jewelry tells service members 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 service member agrees to participate in this “credit-improving program” does Harris Jewelry begin to discuss jewelry or its other products with the service member in an effort to max out the credit limit, the AG's Office said.
The complaint alleges that Harris Jewelry advertises “quality” jewelry on “fair” terms, but in reality, marks up its jewelry between 600 and 1,000 percent over its wholesale price (the industry standard is 200 to 300 percent), and then attaches an additional interest rate of 14.99 percent on the financing contract, thereby disguising its inflated profit-taking and the true cost of the items.
For example, Harris Jewelry allegedly purchases the popularly sold “Mother’s Medal of Honor” for $77.70 and then sells it for $799 plus warranties and interest.
The “Forever as One Dog Tag Necklace” is allegedly purchased at $97 and sold for $699 plus warranties and interest.
Harris Jewelry’s use of a “per payday” advertised price on its merchandise further prevents the service member from calculating the total cost of a Harris Jewelry transaction over the life of the contract, the AG's Office said. These unlawful business practices are alleged to have been secured through misrepresentations and omissions in advertising and during the loan’s origination.
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.
7 News reached out to Harris Jewelry for comment. It issued the following news release:
Harris Jewelry will vigorously contest the inaccurate and baseless allegations raised by the New York State Attorney General. Harris Jewelry operates in full compliance with the laws that regulate our industry. Harris Jewelry stands behind its decades-old business model. The New York Attorney General has unfortunately reached the wrong conclusions about our business and the work we do.
For more than 60 years, Harris Jewelry has sold quality jewelry and watches to active duty military personnel, Reservists, National Guard, and Retirees. Today, the company continues to honor that tradition and enables its customers to purchase quality jewelry designed specifically for them, and to do so on credit terms customized to meet their needs.
Harris Jewelry™ was founded in 1955 by Jerome L. Harris, a Marine and World War II Veteran. He believed that U.S. Military Service Personnel were entitled to purchase jewelry on reasonable credit terms. Harris Jewelry continues this mission today and offers military communities quality jewelry and watches with exceptional customer service and fair, and transparent payment policies, which are available at www.harrrisjewelry.com.
