Harris Jewelry will pay refunds and stop loan collections to settle predatory loan charges
Harris Jewelry, a now-defunct jewelry retailer that government officials say preyed on military families by selling them overpriced trinkets using high-interest loans, will pay million in repayments and will stop collecting its loans under a settlement agreement announced Wednesday by the federal government. Commerce Commission and 18 state attorneys general.
The company operated a small chain of stores near military bases and specialized in selling jewelry and military memorabilia with financing that often left buyers in debt, prosecutors said. The company also made false claims, they said, such as promising to donate proceeds from certain items to charity, but did not follow through.
“Today’s action will help thousands of service members get back on their feet after falling victim to the Harris Jewelry schemes,” said New York State Attorney General Letitia James, whose office has sued Harris Jewelry in 2018. “Predatory lenders and companies that harm the military should be warned that their actions will not be tolerated.
Harris Jewelry closed its stores last year. The settlement requires the company, based in Hauppauge, New York, to stop collecting $21 million in loans still held by 13,000 service members. It must also reimburse nearly $13 million to 46,000 people who paid for “lifetime protection plans” on their purchases – an add-on that was supposed to be optional but was often added without the buyer’s knowledge. prosecutors said.
Those eligible for compensation will receive an email and letter in the mail regarding the settlement agreement.
Harris Jewelry, which neither admitted nor denied the allegations, said in a written statement that it would not reopen its stores. The settlement “resolves these issues in the best interests of all of its stakeholders,” the company said.
Predatory lending to the military is a growing concern for regulators and watchdogs; soldiers’ steady paychecks – and the financial naivety of many young recruits – are a powerful lure for peddlers. Ms. James’ office cited Harris Jewelry’s “Mother’s Medal of Honor” necklace as an example of her tactic: The company bought the item from its wholesaler for less than $78 and sold it for $799. Taxes, fees, and the protection plan brought the total price many buyers paid to nearly $975.
When buyers fell behind in their payments, Harris Jewelry reported the defaults to credit reporting agencies, which hurt customers’ credit scores. As part of Wednesday’s settlement, the company agreed to order the credit bureaus to remove those negative entries.