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Post date: October 29 2018

A.G. Underwood Announces Lawsuit Against Harris Jewelry For Targeting Military Servicemembers With Illegal Business Practices 

News from the New York Attorney General's Office 

October 29, 2018

Attorney General's Office Press Office / 212-416-8060 


Multistate Investigation Leads to Lawsuit Against National Military-Themed Jewelry Retailer for Allegedly Duping Servicemembers into Illegal In-House Financing Contracts for Overpriced Jewelry 

AG’s Complaint Alleges that Harris Jewelry Marks Up Jewelry Between 600 and 1,000% Over Wholesale, then Adds 14.99% Interest

WATERTOWN – Attorney General Barbara D. Underwood today announced a lawsuit against Harris Jewelry – a jewelry retailer headquartered in New York, with dozens of locations across the country including one near Fort Drum in New York – for engaging in false and deceptive acts and illegal lending in the financing of jewelry sales to active-duty servicemembers. This lawsuit is the result of an ongoing multistate investigation co-led by New York and Tennessee. Harris Jewelry is the trade name of Harris Originals of NY, Inc., as well as numerous other eponymous corporations, all named in the complaint.

“As we allege, Harris Jewelry used servicemembers as pawns in a predatory scheme,” said Attorney General 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 servicemembers. The company, headquartered in Hauppauge, NY, has retail stores near, and in some cases on, military bases around the country. Their New York retail location is just outside Fort Drum at the Salmon Run Mall in Watertown. It is alleged that Harris Jewelry targets and then entices local servicemembers 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. In fact, the complaint alleges that this is nothing more than a marketing ploy to dupe servicemembers 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. In reality, 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% of its sales. The complaint further alleges that Harris Jewelry tells servicemembers 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 servicemember agrees to participate in this “credit-improving program” does Harris Jewelry begin to discuss jewelry or its other products with the servicemember in an effort to max out the credit limit.

The complaint alleges that Harris Jewelry advertises “quality” jewelry on “fair” terms, but in reality, marks up its jewelry between 600 and 1,oo0% over its wholesale price (the industry standard is 200 to 300%), and then attaches an additional interest rate of 14.99% 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 servicemember from calculating the total cost of a Harris Jewelry transaction over the life of the contract. 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.

The case is being handled by Assistant Attorney General In Charge of the Watertown Regional Office Deanna R. Nelson and Assistant Attorney General Alicia M. Lendon, with assistance from Volunteer Attorney Ivie Iyamu, Intern Robert Blackstock, and Investigator Chad Shelmidine. The Regional Office is part of the Division of Regional Affairs, which is led by Acting Executive Deputy Attorney General Gary Brown.