AG Jennings announces $34.2 million national settlement with Harris Jewelry 

Jewelry chain defrauded thousands of servicemembers and veterans

Attorney General Kathy Jennings, through the Fraud Division’s Consumer Protection Unit and in connection with 17 other states and the FTC, has secured a recovery of $34.2 million for more than 46,000 servicemembers and veterans nationwide who were deceived and defrauded by jewelry retailer Harris Jewelry.

Harris Jewelry 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’s conduct was unconscionable,” Attorney General Jennings said.  “Instead of the honor, respect, and support owed to all who are serving and have served our country, Harris Jewelry preyed on those populations for a cheap buck.  Today’s agreement serves as a stark reminder to those, like Harris Jewelry, who would do so that neither Delaware nor her sister states and commonwealths will allow such conduct to go without consequence.  It is also a reminder to all of us of the debt we all owe to this country’s servicemembers and veterans.”

Harris Jewelry, headquartered in Hauppauge, New York, operated retail stores near and on military bases around the country. Their business model was designed to primarily target and servicemembers. A multi-state investigation led by New York 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. That investigation found that no legal contract was actually signed between Harris Jewelry and the charity it claimed to support. Moreover, consumers were often given varying and conflicting information about the amount donated to the charity. Sometimes they were told all the proceeds would be donated, other times they were told only a portion would be donated.

In addition, Harris Jewelry offered servicemembers predatory lending contracts that were marketed to servicemembers as a way to build or improve their credit scores. The credit advanced to servicemembers through the Harris Program 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 jewelry itself was significantly overpriced and poor quality. The investigation found that 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. The jewelry was not worth the price and consumers often reported stones falling out, chains breaking, and the finish fading.

Harris offered servicemembers protection plans on the jewelry, which they claimed was optional but was added to nearly all eligible transactions without their awareness. The costs of the protection plans ranged from $39.99 to $349.99, depending on the retail price of the item. In some instances, the cost of the protection plan exceeded the wholesale cost Harris paid for the item. Protection plans were added to a consumer’s retail installment contract as a routine practice without disclosure.

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. Using the $799 Mother’s Medal of Honor as an example, servicemembers were charged $79.99 for a protection plan, taxes, and other fees, bringing the total principal cost to $974.31. At a 14.99 percent interest rate over a 10-month period, the total amount paid by a servicemember ended up being $1,039.26 for the Mother’s Medal of Honor.

In essence, Harris Jewelry used charity pleas as a marketing tactic to dupe servicemembers into signing high-priced, deceptive in-house financing contracts for vastly overpriced jewelry. The jewelry was poor quality, the prices were highly inflated, the finance contracts had hidden fees, and the payments were directly tied to the military pay days.

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 the FTC alleged that Harris Jewelry had done all of the following:

  • Made false or unsubstantiated claims that financing jewelry purchases through the company would result in higher credit scores: The company told servicemembers that they would achieve a significant improvement in their credit score by entering into a retail installment contract with Harris Jewelry when, in fact, that was not true in many instances.
  • Misrepresented that the protection plan was required to finance purchases: In connection with the sale of jewelry and military-themed gifts, Harris Jewelry offered a protection plan that covered ring and watch sizing, battery replacements, and repairs. In several instances, the company gave the false impression that the protection plan was not optional or was required to finance the purchase, when it was in fact optional.
  • Failed to provide written disclosures and meet authorization requirements for contracts as required by law: Harris Jewelry failed to include written disclosures in its retail installment contracts as required by the Truth in Lending Act and Military Lending Act and meet authorization requirements as required by the Electronic Fund Transfer Act. Its internet and print ads also failed to include the required Truth in Lending disclosure. The company also failed to provide written notice as required by the FTC’s Holder Rule in its contracts and failed to make oral disclosures at the time of sale as required by the Military Lending Act.

Today’s agreement requires Harris Jewelry to stop collecting $21,307,229 in outstanding debt that is held by 13,426 servicemembers and to provide $12,872,493 in refunds to 46,204 servicemembers who paid for protection plans. Harris Jewelry is also required to vacate judgments against 112 consumers totaling $115,335.64 and delete any negative credit entries reported to consumer reporting agencies.

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 a letter in the mail notifying them of this agreement and their eligibility.  Servicemembers will then have to claim their restitution.

The 17 states joining Delaware and the FTC in today’s agreement are California, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Louisiana, Maryland, Nevada, New York, North Carolina, Pennsylvania, Virginia, and Washington.

The matter was handled by DAG Jordan Braunsberg and Paralegal Zuri Ramsey of the Fraud Division’s Consumer Protection Unit.

Note: Harris Jewelry, which is now closed, is not affiliated with the local Delaware retail business Harris Jewelers.

Statement From AG Jennings On McGuiness Verdict

Attorney General Kathy Jennings released the following statement today after a jury convicted State Auditor Kathleen McGuiness of Official Misconduct, Structuring, and Conflict of Interest:

“From the moment I took office, I promised that no one would be either above the law or beneath justice. Today’s guilty verdict confirmed that. After weeks or grueling trial and mistreatment of whistleblowers, the state auditor — whose job is to protect our state from waste, fraud, and abuse – has been found guilty of three crimes by a jury of her peers. I am grateful for the jury’s judgment, for the excellent work of our trial team, and above all else for the courage of the whistleblowers and witnesses who came forward and made accountability possible. Our office’s — and the jury’s —message is clear: abuse of office will not be tolerated in Delaware.”

Today’s verdict marks the first conviction of a sitting statewide elected official in Delaware history.

Statement from AG Jennings on Supreme Court’s Climate Ruling

Attorney General Kathy Jennings released today the following statement regarding the U.S. Supreme Court’s ruling in West Virginia v. Environmental Protection Agency:

“The Supreme Court’s ruling is the latest in a dangerous, disgraceful pattern of decisions that risk the health of our neighbors, of our state, and now the very fate of our planet. The court’s ruling is a boon to the fossil fuel industry when it is already reaping record profits; for the rest of us, it is a gut punch when we are already far behind in the race to avoid catastrophe.

“Sound environmental policy is not optional for Delaware. The stakes are unique here: our state, which has the lowest mean elevation in the country, is caught between an encroaching sea to our east, air pollution from coal-burning states to our west, and a legacy of industrial pollution beneath our feet. Despite this ruling, we will continue to fight for sane environmental policy in state and federal court — and we will support the efforts of state and federal leaders to demonstrate the responsibility that the court has abandoned.”

AG Jennings Wins Seaford Lawsuit

Chancery ruling invalidates illegal fetal tissue ordinance

A fetal tissue ordinance enacted by Seaford City Council late last year has been overturned following a successful legal challenge by Attorney General Kathy Jennings and the Delaware Department of Justice.

The ordinance, enacted on December 14 with an original effective date of January 22, would have forced anyone who had a surgical abortion at an “abortion facility” or a miscarriage at a “health care facility” to have the fetal tissue interred or cremated at their own expense, despite the hardship on patients and clear preemption by State law.

In a ruling released Wednesday morning, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery ruled that the City of Seaford, as a junior sovereign, cannot enact a law that conflicts directly with law established by the State as the senior sovereign.

“The U.S. Supreme Court has unleashed a wave of extremist, draconian laws across our country. That wave stops here,” said Attorney General Kathy Jennings. “This ruling firmly rejects a clearly illegal and harmful attempt to nullify State law and to use dark money to return us to the Dark Ages. It protects residents and visitors of Seaford from a cruel and frankly hateful policy. And it makes clear that Delaware remains a safe haven for choice and reproductive freedom exactly when those sanctuaries are needed most. I am grateful to the Court for its wisdom and to our team for their quick response and tireless work on this case.”

Jennings filed suit on January 11 after twice warning Seaford City Council that State law preempted the ordinance. Council passed the ordinance despite those warnings, with a promise that an anonymous outside donor would fund the defense against the State’s incoming lawsuit. The Court’s ruling awards costs to the State.

“Even after last week’s devastating Dobbs decision, abortion remains a codified right in Delaware,” said Mike Brickner, executive director of the ACLU of Delaware. “Yesterday, our General Assembly fortified that right by expanding access to abortion, and today, the Delaware Chancery Court also reinforced that right, making it clear that municipal attacks on our state-guaranteed right to abortion won’t stand. ACLU-DE applauds Attorney General Kathy Jennings, and her team, for their swift and effective legal action against Seaford’s city council to permanently block the city’s illegal fetal remains ordinance.”

“Planned Parenthood of Delaware is pleased with this decision,” said Ruth Lytle-Barnaby, president and CEO of Planned Parenthood of Delaware. “As we expected, Vice Chancellor Laster recognized state law forbids local regulations of the type the city attempted to pass. We are hopeful that we can now focus on providing care to the Seaford area rather than defending ourselves against unnecessary, harmful, and legally questionable ordinances. Our sincere thanks go to the Department of Justice for their hard work on this case and their commitment to defending reproductive rights. PPDE will continue to offer top-notch care to all and to fight for your ability to receive sexual and reproductive health services.”

“This decision is a victory for women and for the rule of law in Delaware,” said Melissa Froemming, president of Delaware NOW. “We thank the Delaware Department of Justice for standing up for women in our state, and for fighting to ensure that women’s right to privacy and right to make decisions regarding their bodies remain protected. Our legislators have codified Roe — abortion is legal in Delaware — but legislators change. The Seaford ordinance and Friday’s Dobbs decision by the Supreme Court have reinforced the importance of protecting and expanding the right to abortion as health care in Delaware using every tool possible. We are grateful to have a champion in Attorney General Jennings.”

Since the DOJ’s arguments were premised on State law, the State’s case, and the Court of Chancery’s ruling, are unaffected by the U.S. Supreme Court’s recent ruling in Dobbs v. Jackson Women’s Health Organization.

The lawsuit against Seaford was led by Director of Impact Litigation Christian Douglas Wright with support from the attorneys and staff of the Fraud and Consumer Protection Division and Civil Division: Deputy Attorney General Vanessa L. Kassab, Assistant Attorney General Deepinder K. Goraya, and Paralegals Zuri Ramsey and Michele Porter.

Statement from AG Jennings on Dobbs ruling

Attorney General Kathy Jennings released the following statement today regarding the U.S. Supreme Court’s ruling in Dobbs v. Jackson Women’s Health Organization:

“Just one day after dramatically curtailing states’ rights to regulate guns, the Supreme Court has upended a half-century of legal precedent by permitting states to regulate women’s most basic freedom — control over our own bodies. It is a sad statement about this Court’s priorities, which are so far out of step with the American people and explain the public’s cratering confidence in its highest court. While Delaware has robust statutory protections in place for abortion — and I am more grateful by the day that our legislators and advocates had the foresight to install those safeguards — the truth is that this ruling is a terrifying prospect for millions of people in other states.

Make no mistake; the stakes now are not simple matters of opinion. It is a matter of fact that the draconian abortion policies this right-wing ruling has enabled will be harmful, even deadly, to women who either cannot receive lifesaving care or seek an abortion outside of a medical environment. It is a matter of fact that some of these laws enable criminal prosecution of doctors who provide life-saving medical care. And it is a matter of fact that these laws will disproportionately harm the working poor and people who already have children and may face economic destitution as a result of this ruling.

Those of us who’ve spent our lives fighting to preserve this central right have not been alarmist. And we can be sure that other rights that we’ve taken for granted, including contraception and marriage equality may be next.

Our priority now must be ensuring that people who need abortions have the resources to get them; ensuring public officials in our state continue to protect choice; and continuing to fight against efforts in Delaware and nationwide to curtail reproductive rights.”