AG Ferguson Wins $1.5 Million in Reimbursements and Debt Relief for Over 1,000 Washington Servicemen

Harris Jewelers went after members of the military with shoddy jewelry, exorbitant prices and stretches of credit

TACOMA— Attorney General Bob Ferguson announced today that national jewelry store Harris Jewelers will provide more than $1.5 million in debt relief and refunds to more than 1,000 Washington service members. The company specifically went after active-duty military members and pressured them into signing contracts that Ferguson said violated federal military loans law and state consumer protection law.

Harris Jewelers closed all of its stores, including a store in the Tacoma Mall that it only operated for a few years, and now only offers service for products purchased online. It had stores in 17 states, all near military bases, and its motto was “Serve those who serve.”

“Harris Jewelers has done a disservice to those who have served,” Ferguson said. “I am proud of my office’s proven track record of shutting down businesses and charities that prey on military service members. Our work to protect military personnel in Washington State does not end there.

Today’s announcement is part of a multi-state resolution. To avoid a lawsuit in the U.S. District Court for the Eastern District of New York, Harris Jewelers will stop collecting contracts worth $21.3 million nationwide and reimburse more than $12.8 million to tens of thousands of service members across the country who have purchased extended warranties from Harris. , also known as the “Jewellery and Watch Protection Programs”.

Under the terms of the judgment, Harris Jewelers will stop collecting $911,525 in debt for 547 Washington service members who made purchases at the company’s stores, which averages about $1,666 per customer. Under a separate claims process, $597,925 will be split among 1,804 people eligible for refunds based on the warranties they purchased.

The Attorney General’s Office and Harris Jewelers will notify service members who have made purchases through its Jewelry and Watch Protection Program of their eligibility for refunds. Harris Jewelers will email all members of the service who will receive debt relief. Some service members will receive both debt relief and additional service fee reimbursement, depending on the programs they have used with Harris Jewellers.

In addition, the company must pay Washington State $50,000, which the attorney general’s office will divide among four armed forces relief organizations that help active-duty service members in Washington. These organizations offer interest-free loans to military personnel in need of financial assistance. Here’s how the Attorney General’s office will distribute that money among these organizations, which in part reflects each service’s respective active duty population in Washington:

Harris Jewelers is also facing a $24 million suspended civil penalty due to its compliance with legally mandated changes to its business practices.

Harris Jewelers hidden charges amounted to illegal interest charges

Harris Jewelers focused almost exclusively on selling on credit to the military. He also advertised special rates and deals for the military, but in reality, those deals were either illusory or still available.

Investigators and attorneys found that Harris Jewelers hid the true cost of the jewelry it sold using high markups coupled with fake discounts, then added hidden fees, maintenance plans and other costs to inflate the price . These plans could add an additional $100 to over $1,000 to the long-term total.term cost to service members.

The additional fees and price increases allowed the company to claim to service members that it had not violated high interest rate laws. The Military Loans Act limits the interest rate to 36% that a company can charge the military. Harris Jewelers used an interest rate lower than this, around 15%, but the inflated cost of their jewelry and additional fees had the effect of creating a much higher interest rate. Ferguson claimed this amounted to an unfair and deceptive business practice.

As an example of how this conduct worked, Harris Jewelers could price a diamond ring worth $200 to $1,500. In addition, he would then receive hundreds of additional dollars in interest charges and hundreds more in additional fees that he aggressively marketed to consumers on the initial purchase of the ring.

Washington led the investigation into Harris Jewelers’ business practices with the Federal Trade Commission, New York, Nevada, North Carolina and Virginia. Attorneys General from California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana and Maryland also participated in investigation and settlement.

Assistant Attorney General John Nelson handled the case for the Attorney General’s Office.

How to avoid similar predatory companies

When it comes to jewelry, compare costs and look at the market. Also, make sure the jeweler uses industry standards to price their products: carat weight, clarity, color, and cut. Harris Jewelers did not meet these standards and offered poor quality jewelry at high prices.

Consumers should also beware of hidden costs such as warranties and excessive fees. You can check if a company has a registered warranty with the state insurance commissioner here: https://fortress.wa.gov/oic/consumertoolkit/Search.aspx.

Harris Jewelers did not register its warranty programs with the state, which was a violation of state law.

Earlier tribunal wins against companies attacking military

In 2016, USA Discounters provided more than $2.1 million in relief to 2,400 service members and veterans who entered into its contracts in Washington State. Ferguson and 47 other attorneys general alleged that US discounters were selling overpriced household goods at high interest rates, often using the military attribution system to secure payment. The company obtained contracts through misrepresentations and omissions in advertising, when granting a loan and during the collection process.

USA Discounters owned other businesses that sold furniture, appliances, televisions, computers, smart phones, jewelry, and other consumer goods, mostly on credit. USA Discounters generally sold to members of the military and veterans, advertising did not deny them credit.

In 2015, Freedom Stores provided $63,000 to service members after a multi-state investigation into alleged unfair debt collection and misleading advertising practices. The alleged violations included filing lawsuits against Washington military service members in Virginia without their knowledge and contacting commanding officers with details of a service member’s debt.

The Virginia-based company, which closed its only store in Washington near Joint Base Lewis-McChord in August 2015, sold furniture, electronics, jewelry and other goods primarily to military service members.

Ferguson’s priority is providing legal assistance to service members and veterans

Ferguson has an ongoing military and veterans initiative to advocate for Washington’s active duty military and veterans. This includes engaging and educating service members and veterans about their rights and the resources available to them, vigorously enforcing legal protections under the authority of the Attorney General, and promoting and facilitating access to services. civil legal.

The Office of the Attorney General of Military and Veteran Legal Assistance (OMVLA) was established by legislation at the request of the Attorney General in the 2017 session to promote and facilitate access to civilian legal services for current members and Washington military service alumni. OMVLA is authorized to recruit and train pro bono attorneys, maintain a registry of available services and volunteers, assess requests for legal assistance, and refer such requests to registered pro bono attorneys and legal aid providers.

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The Washington Attorney General serves the people and the state of Washington. As the largest law firm in the state, the Attorney General’s Office provides legal representation to every state agency, board, and commission in Washington. In addition, the Board serves the public directly by enforcing consumer protection, civil rights and environmental protection laws. The Bureau also prosecutes elder abuse, Medicaid fraud, and handles sexually violent predator cases in 38 of Washington’s 39 counties. Visit www.atg.wa.gov to learn more.

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