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$34.2M Recovered For Thousands Of Service Members Defrauded By Hauppauge-Based Jeweler

Harris Jewelry will pay $34.2 million as part of a settlement with 18 states for “deceiving and defrauding” more than 46,000 service members and veterans, according to the New York Attorney General’s Office.
Harris Jewelry will pay $34.2 million as part of a settlement with 18 states for “deceiving and defrauding” more than 46,000 service members and veterans, according to the New York Attorney General’s Office. Photo Credit: Kallysta G. on Yelp

A New York-based jewelry chain will pay $34.2 million as part of a settlement with 18 states for “deceiving and defrauding” more than 46,000 service members and veterans, according to the New York Attorney General’s Office.

Long Island-based Harris Jewelry, headquartered in Hauppauge, had been accused of using deceptive marketing tactics to lure active-duty service members to their financing program and of falsely claiming that investing in the program would improve customers’ credit scores.

The company also made customers believe that protection plans were required to purchase jewelry and military-themed gifts when they were not, prosecutors said.

“Service members were tricked into obtaining high-interest loans on overpriced, poor-quality jewelry that saddled them with thousands of dollars of debt and worsened their credit,” the AG’s Office said in a statement.

Harris Jewelry ran retail stores near and on military bases around the country for years, primarily targeting service people.

An investigation was ordered after reports that service members had been enticed into retail stores through a marketing scheme dubbed “Operation Teddy Bear.” Prosecutors said Harris Jewelry advertised teddy bears in military uniforms and claimed that sales supported charitable donations.

But, the attorney general’s investigation found that the company never actually had a legal contract with the charity, Operation Troop Aid, Inc.

Prosecutors described the jewelry sold by the company as “significantly overpriced and poor quality,” noting that retail prices were dramatically inflated. Customers often reported stones falling out, chains breaking, and the finish fading, prosecutors said.

As part of the settlement, the company agreed to refund nearly $13 million to 46,204 service members who paid for lifetime protection plans, and stop collecting more than $21 million in outstanding debt held by over 13,000 customers.

Harris Jewelry must vacate judgments against 112 consumers totaling more than $115,000 and delete any negative credit entries reported to consumer reporting agencies.

The company was also required to pay $1 million to the 18 states, of which New York will receive $150,000 that will go toward Jefferson County for programs to support veterans and servicemembers, the AG’s Office said.

“It’s abhorrent that Harris Jewelry built their business by taking advantage of young servicemembers risking their lives to protect our country,” said Attorney General Letitia James. “Harris Jewelry claimed to serve and support our troops, but its business practices were entirely self-serving.”

The attorney general’s office said those who entered into financing loans with the company starting in January 2014 will be eligible for restitution to the extent they paid for warranties. An independent monitor will be installed to oversee the relief and contact those who are eligible.

The 17 other states involved in the settlement are California, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Iowa, Kansas, Louisiana, Maryland, Nevada, North Carolina, Pennsylvania, Virginia, Washington, and Hawaii.

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