California Attorney General Rob Bonta and San Diego County District Attorney Summer Stephan have announced a $500,000 settlement with Attractive Gems Jewelers and its owners. The settlement resolves allegations of deceptive lending practices by the San Diego-based jewelry store. A joint investigation found that Attractive Gems misled consumers by promoting a store credit line as a means to build credit without providing necessary disclosures.
The proposed settlement, pending court approval, includes $400,000 in consumer restitution and $100,000 in civil penalties. It also enforces injunctive terms to prevent future misconduct.
“Deceiving consumers and using false advertising to sell credit products has no place in California,” said Attorney General Bonta. “Attractive Gems Jewelers lured consumers in — including military servicemembers based in Southern California — with false promises of helping to build their credit.”
From 2020 to 2022, Attractive Gems marketed a $10,000 store-use only credit line for an annual fee of $149.99. The company claimed this would improve credit scores by reporting accounts monthly to credit bureaus. However, they continued selling the product even after being informed that the bureaus would not report these lines on consumer reports.
The investigation revealed that Attractive Gems failed to provide required credit disclosures under state and federal law. These disclosures are crucial for borrowers to understand loan details such as borrowing amounts, interest rates, monthly payments, and total interest costs.
Additionally, Attractive Gems included unlawful arbitration clauses in contracts with military service members, violating the federal Military Lending Act. This act protects service members from predatory lending practices by ensuring they do not waive their right to sue or lose other legal protections when obtaining loans.
