Richmond, VA  – Attorney General Jason Miyares has joined a multistate settlement involving the Federal Trade Commission (FTC) and seventeen other state attorneys general that recovers $34.2 million for more than 46,000 servicemembers and veterans who were deceived and defrauded by national jewelry retailer, Harris Jewelry. The jewelry company used deceptive marketing tactics to lure active duty servicemembers to their financing program, falsely claiming that investing in this program would improve servicemembers’ credit scores. Instead, servicemembers 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 18-state agreement requires Harris Jewelry to refund tens of thousands of servicemembers for warranties they were tricked into purchasing, to stop collecting millions of dollars of debt, to correct bad credit scores, and dissolves all of Harris Jewelry’s businesses. This agreement also requires Harris Jewelry to pay $1 million to all 18 states.

“Harris Jewelry targeted our military community, misleading, deceiving, and defrauding thousands of active duty servicemembers through their financing program. Our servicemembers are critical to the American experiment, dedicating their lives to the protection of our freedoms and way of life. I’m grateful we were able to reach an agreement and provide relief to thousands of Virginians,” said Attorney General Miyares.

Per the agreement, there is $1,084,912.58 in potential restitution for protection plans for 3,828 Virginians, and $1,703,408.89 in debt forgiveness for 1,011 Virginians.

Harris Jewelry operated retail stores near and on military bases around the country. Their business model was designed to primarily target and service people in the military. A multistate investigation found that local servicemembers were enticed into retail stores through a marketing scheme, dubbed “Operation Teddy Bear,” in which Harris Jewelry advertised teddy bears in military uniforms with promises of charitable donations. The investigation found that no legal contract was signed between Harris Jewelry and the charity it claimed to support and consumers were given varying and conflicting information about the amount donated to the charity.

In addition, Harris Jewelry offered servicemembers predatory lending contracts claiming to build or improve their credit scores. The credit advanced to servicemembers was not based on a consumers’ credit score, potential income, or other legitimate factors that banks consider. Rather, it was based on a servicemember’s branch of service, the amount of time they have remaining on the term of enlistment, and the category of merchandise they purchased. Servicemembers were led to believe that they were investing in the Harris Program and the jewelry they purchased was a gift from Harris Jewelry.

The company dramatically inflated the retail price of its products, generally by multiplying its wholesale cost by six or seven times, and in some cases 10 times the wholesale cost. For example, Harris Jewelry purchased its popular Mother’s Medal of Honor at $77.70 but sold it at $799. Additionally, Harris Jewelry consistently added protection plans to the transactions without disclosure to the servicemembers.

With the inflated purchase price, protection plans, taxes, shipping and handling fees, teddy bears, and other fees, servicemembers were charged more than they were initially told.

According to today’s consent order, Harris Jewelry violated the FTC Act, the Truth in Lending Act, the Electronic Fund Transfer Act, the Military Lending Act, the Holder Rule; and state laws in connection with jewelry sales and financing to members of the military.

Specifically, the states and FTC allege that Harris Jewelry:

• Made false or unsubstantiated claims that financing jewelry purchases through the company would result in higher credit scores; 
• Misrepresented that the protection plan was required to finance purchases; and
• Failed to provide written disclosures and meet authorization requirements for contracts as required by law. 

Servicemembers and veterans who entered into a predatory financing loan with Harris Jewelry between January 2014 and July 2022 will be eligible for restitution to the extent they paid for warranties. An independent monitor will be installed to oversee the relief and contact eligible servicemembers and veterans. Eligible servicemembers and veterans will receive an email and letter in the mail notifying them of this agreement and their eligibility. Eligible servicemembers will then have to claim their restitution.

Joining Attorney General Miyares in today’s announcement are the FTC and the attorneys general of California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana, Maryland, New York, Nevada, North Carolina, Pennsylvania, and Washington.