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Jewelry Chain Sued for Alleged Illegal Business Practices

It’s accused of preying on servicemembers.

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WATERTOWN, NY – New York’s attorney general has hit Harris Jewelry with a lawsuit claiming that the chain “used servicemembers as pawns in a predatory scheme.”

In a press release, Attorney General Barbara D. Underwood’s office states that the retailer, which has dozens of locations across the country, engaged in “false and deceptive acts and illegal lending in the financing of jewelry sales to active-duty servicemembers.”

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

Harris Jewelry said in a statement:

“Harris Jewelry will vigorously contest the inaccurate and baseless allegations raised by the New York State Attorney General. 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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The lawsuit is the result of an ongoing multistate investigation co-led by New York and Tennessee.

Specifically, it 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 stores near, and in some cases on, military bases around the country.

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,” according to the release.

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, according to the release.

According to the release: “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.”

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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 press release states.

The complaint alleges that Harris Jewelry advertises “quality” jewelry on “fair” terms, but in reality, marks up its jewelry between 600 percent and 1,000 percent over its wholesale price compared with the industry standard of 200 percent to 300 percent. It says the company 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 release.

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, according to the release. 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, according to the release. 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 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, according to the release.

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.

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Over the years, INSTORE has won 80 international journalism awards for its publication and website. Contact INSTORE's editors at editor@instoremag.com.

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Jeweler Sentenced for Theft, Ordered to Pay $85,000 in Restitution

He’ll have to serve 4 years of probation.

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A Colorado jeweler who was accused with stealing gold, jewelry and money from customers has been ordered to pay restitution and serve a probationary sentence.

David Kushnir, who operated D & D Jewelers in Thornton, pleaded guilty to theft, KMGH-TV reports. He was accused of stealing from nine customers, according to the news outlet.

The court ordered Kushnir to pay about $85,000 in restitution and serve four years of economic crime supervised probation.

In January, authorities accused Kushnir of defrauding customers after they brought their diamonds, watches and other jewelry to him for repair or consignment sale at his business. It was also alleged that he sold fake diamonds to three victims.

The Sentinel newspaper reported in January that in one case, he was accused of removing a movement piece worth $40,000 from a Rolex watch he was asked to repair and then substituting “a Chinese piece.”

Read more at KMGH-TV

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Pandora to Buy Back $75M in Jewelry from Retailers

The effort is part of a broader restructuring program.

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Pandora plans to buy back about $75 million in jewelry from retailers.

The idea is to help retailers avoid holding onto stock for too long, Rapaport News reports.

The repurchased inventory will be smelted, with new jewelry to be made from the material.

Rapaport reports that the program will be rolled out in “select global markets.”

The effort is part of a broader Pandora restructuring program expected to cost the company over $224 million.

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The plan comes as Pandora prepares for a brand relaunch that will kick off Aug. 28 in Los Angeles.

At the event, the company “will reveal its new company purpose, brand expression and visual identity, and show the Autumn 2019 collection.”

Read more at Rapaport News

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Online Costume Jewelry Retailer Ventures Into Gold and Diamonds

Prices range from $55 to nearly $1,000.

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BaubleBar, known for selling trendy costume jewelry online, is entering the world of gold and diamonds.

Its collection, launching Aug. 14, consists of rings and earrings, WWD reports. The jewelry will be sold online and will include “streamlined hoop and stud shapes for earrings and simple, embellished bands for rings.”

The news site added: “Some more directional earrings take the shape of letters or safety pins.”

Prices range from $55 to nearly $1,000.

Daniella Yacobovsky-Fiala, co-founder of BaubleBar, said the company is responding to demand.

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“Since the beginning, the voice of our customer has led our product evolution,” she said.

BaubleBar began dabbling in fine jewelry in October 2017, when it rolled out its Everyday Fine collection. The line consisted of 18K gold-plated sterling silver pieces selling for under $100.

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