LI Company Oversold Military-Themed Jewelry To Servicemembers: AG

HAUPPAUGE, NY - A lawsuit was filed on Monday accusing a Hauppauge-based jewelry retailer of engaging in false and deceptive business practices, including selling overpriced jewelry to active-duty servicemembers, according to Attorney General Barbara D. Underwood.

The lawsuit was filed against Harris Jewelry, which has dozens of locations across the country including one near Fort Drum in New York, according to the attorney general.

The company 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.”

However, the jewelry retailer is accused of engaging 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 AG said.

Harris Jewelry allegedly targets and then entices local servicemembers into the stores with “Operation Teddy Bear”— a purported charitable program in which the company sells teddy bears in military uniforms with promises of charitable donations, according to the AG.

However, this is allegedly just a "marketing ploy to dupe servicemembers into high-priced, illegal in-house financing contracts for vastly overpriced jewelry," the attorney general said.

The lawsuit also states that Harris Jewelry sells items on credit it provides under the name Consumer Adjustment Corp. USA, which is 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.

Harris Jewelry is also accused of telling servicemembers it can provide them with an opportunity to build or improve their credit score through “The Harris Program”— the company’s own financing, according to the AG.

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 attorney general said.

The complaint alleges that Harris Jewelry advertises “quality” jewelry on “fair” terms, but in reality, marks up its jewelry between 600 and 1,oo0 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, according to the attorney general.

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 AG said.

The “Forever as One Dog Tag Necklace” is allegedly purchased at $97 and sold for $699 plus warranties and interest, according to the AG.

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.

Operation Troop Aid Inc., the original charitable partner in Operation Teddy Bear, voluntarily dissolved and was 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 AG said.

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,” Underwood said. “My office will not tolerate companies that seek to take advantage of New Yorkers in order to line their own pockets.”

In a statement, a spokesperson for Harris Jewelry said the company will "vigorously contest the inaccurate and baseless allegations raised by the New York State Attorney General."

Read the full statement below:

"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."

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