A nationwide jewelry retailer has agreed to pay $34.2 million to resolve allegations that it used deceptive sales tactics on active duty service members, including those stationed in San Diego, it was announced Wednesday.
Harris Jewelers reached the settlement with the Federal Trade Commission and the attorneys general of more than a dozen states. It requires the company to write off $21.3 million in consumer debt and provide millions in consumer refunds. The debt includes more than $800,000 owed by Californians, according to a statement from the California Attorney General's Office.
Sign up for our Breaking Newsletter to get the most urgent news stories in your inbox.
Officials in California said Harris operated stores on or near military bases, including Naval Base San Diego, where service members were told that purchasing products on credit would improve their credit scores, regardless of the customer's credit history. The company also "utilized unfair and deceptive sales practices" with its jewelry protection plan and did not include disclosures in its advertisements and retail installment sales contracts, according to the AG's Office.
The settlement requires Harris to stop collecting the more than $21.3 million in outstanding debt held by 13,426 service members, and provide nearly $12.9 million in refunds to 46,204 service members who paid for protection plans. Those refunds include more than $700,000 to California service members.
The company will also be required to vacate judgments against 112 consumers, which totaled more than $115,000, while deleting any negative credit entries reported to consumer reporting agencies.
Injunction terms also include a ban on the future marketing or sale of related products.