Utah-based jewelry company Paparazzi has agreed to pay $1.9 million and reform its business practices in Washington state following an investigation by the Attorney General’s Office into allegations of a pyramid scheme. Attorney General Nick Brown announced that 7,100 Washington residents who sold jewelry for the company will receive checks averaging $180.
"Our investigation showed Washingtonians were clearly harmed by Paparazzi," Brown stated. "Advertising too-good-to-be-true returns on investments is one of the ways companies and individuals try to deceive Washingtonians."
The settlement allows Paparazzi to avoid a lawsuit over violations of the state's Consumer Protection Act and Antipyramid Promotional Scheme Act. As part of the agreement, those who sold Paparazzi products can return any unsold merchandise purchased after January 2017 for a full refund.
The resolution mandates increased transparency from Paparazzi if it wishes to continue operating in Washington state. It includes a claims process for refunds for customers who bought jewelry containing lead and nickel, despite advertisements claiming these products were free from such heavy metals.
Furthermore, the resolution requires reforms in how Paparazzi advertises its sales program, including full disclosure of potential income sales consultants might earn.
The Consumer Protection Division, funded through recoveries from businesses violating consumer protection laws rather than taxpayer money, supports various divisions within the Attorney General's Office. These include Consumer Protection, Antitrust, Wing Luke Civil Rights, Environmental Protection divisions, Medicaid Fraud Control, and Complex Litigation divisions.
Recent consumer protection efforts have resulted in significant victories. The Consumer Resource Center answers between 25,000-30,000 calls annually and returns over $10 million to consumers each year through informal dispute resolutions. Additional consumer protection actions arise from calls and complaints handled by assistant attorneys general throughout the year.
Assistant Attorneys General Ben Brysacz and Joe Kanada managed this case along with Paralegals Joseph Drouin, Luis Oida, and Heather Zamudio. Former Assistant Attorneys General Susana Croke, Kevin Eggers, and Camille McDorman also contributed before leaving the office.
Washington's Attorney General's Office serves as the state's largest law firm providing legal representation to every state agency while enforcing consumer protection laws among others across 38 counties in Washington state.