You just bought fine jewelry over the internet. You shopped several dealers offering diamonds certified by major laboratories and found a company with a much better deal than the others. Their diamonds were several grades better for the same money, in fact , their deals were “TOO GOOD TO BE TRUE”.
While the grading “labs” used weren’t the familiar GIA (Gemological institute of America – Gem Trade Laboratory) or AGS, (American Gemological Society Laboratories) they still had three initials and were represented as “independent’ so you made the purchase. Then, to acquire insurance, you visit NGL for an appraisal……only to have your bubble burst.
We, unfortunately do a lot of bubble-bursting i.e. informing the client the grading is way off, the diamond has been clarity-enhanced without proper disclosure, etc. But, what is surprising is that most of our clients in this scenario either make a polite return (if allowed) or keep the jewelry anyway! Because the “value” amount on our appraisal is usually similar to what was paid, the client GOT WHAT THEY PAID FOR. They were just mislead when the qualitative aspects were grossly inflated.
Do they have recourse? Since most courts view damages as the monetary discrepancy between what was paid and the appraisal value, many think no. But what if the approach were to gain “the benefit of the bargain” by demanding the promised quality? In the hundreds
of such cases we have had, only a couple clients have pressed the internet jeweler to send what they promised. Since only a very, very small percentage of consumers do this, it doesn’t hurt the jeweler if they occasionally make good on their promises. Of course, if all wronged consumers did that, the jeweler would be losing money and that is precisely how you change such practices.
Northwest consumers are fortunate in the fact that our local bricks and mortar jewelers are some of the most reputable in the country and quick to investigate an alleged discrepancy, which often tend to be minor or a matter of “professional opinion”.
There is a big difference, however when you can’t see the jeweler, handle their merchandise and personally confront them if a problem arises. So one needs to investigate virtual jewelers on how they represent themselves, their merchandise, and stand behind their promises – and don’t rely on the “positive feedback” section their web listing. Talk to a real person and tell them you are having your independent appraiser verify their grading. Tell them you expect the quality to be as promised, replacement with the stated quality if not, or a financial adjustment if the grading is off and you still want to keep the piece.
Since most reputable internet dealers tend to use only AGSL and GIA for diamond
grading reports, they won’t be the ones priced way under the rest of the market. And, while there are other respected laboratories out there, the consistency does drop off after the “big two”. The issue comes more into play when the “labs” are merely producing “paper” for the jeweler and their grading (see our last newsletter) seems to be significantly high relative to the asking price. That’s your red flag.
In a recent conversation with a consumer advocate personality I know, I brought up the prospect of a news feature on the prevalence of internet jewelry fraud. His response was “That isn’t news… ……..it’s assumed.” So, protect yourself and remember you have a friend in the diamond appraisal business (that would be us).
The rest is up to you.

Ted

P.S. The Accredited Gemologists Association (of which we are a Certified Lab) has produced a consumer complaint form to report fraud or deceptive practices. It can be procured from their website http://www.accreditedgemologists.org/. along with instructions and possible courses of action.

I am getting really tired of seeing “certified” diamonds and pre-sell appraisals that don’t stack up to the long established standards of the Gemological Institute of America (GIA). Appraisers who advertise their Graduate Gemologists (G.G.) credentials should follow the rules they were taught, whether appraising for the manufacturer, jeweler or consumer.
Ideally, an appraisal is prepared for the owner of the jewelry, with accurate grading and a realistic value for insurance purposes. Nowadays though, jewelers – both traditional and internet, are relying more and more upon appraisals prepared in the interest of selling the item appraised.
These “pre-sale” appraisals are everywhere, even on modestly priced articles and are often supplied by the manufacturers. Don’t get me wrong, I think up-front representation is great, (we started doing similar preliminary reports twenty years ago) but what I am seeing are reports which are more “jeweler friendly” than gemologically accurate. And the values attached tend to be consistently generous (at least compared to the values we follow).

Loose diamonds, too
The sale of loose diamonds on the other hand, usually involves no value – just grading, and that is where some very blatant misrepresentations have come into play.
Unfortunately, obtaining a pre-certified diamond doesn’t guarantee you are getting what the paperwork says. We do a fair amount of appraisals involving verification of pre-existing reports where we check for authenticity and accuracy.
We have uncovered many instances of inaccurate grading if not downright fraud from world-recognized laboratories as well as look-alike “labs” offering bad reports on rice paper.
The remedy is to always have your purchase verified during the appraisal process. We examine the previous document and if discrepancies are found, point them out. In the case of GIA and AGS verification, we will reference the document on our appraisal.
In the event of significant discrepancies you do have recourse. Since the jeweler owes you the quality they represented (even if they didn’t do the lab report) they must make good on your purchase. If you like the article but find it was misrepresented, you may elect to re-negotiate the sales price.
Either way, you don’t have to live with a misinformed purchase. Jewelry is supposed to make you happy, isn’t it?

In the past several months we have seen a definite increase in the amount of false diamond certifications. The most typical scenario is where the client has papers stating an “E” color grade on a diamond that we grade as an H or I. This is far beyond the realm for professional disagreement. Since the transaction prices tend to reflect the true grade of the diamond, it’s obvious that the dealers aren’t selling below their cost, just utilizing false documents to help make a sale.
One recognized lab out of Israel, is a re-occurring culprit in the above story, but others with names that only look familiar are cranking out official looking certificates that bear little resemblance to the diamond described. Since some of these certificates often look like GIA documentation, we have been working with them to investigate further.

Various appraisal and jewelers organizations are currently looking into a recent case that many believe exemplifies the need for regulations on the practices of jewelry appraisers.
The case goes something like this: A local jeweler is given a rather large color-change stone in a ring mounting for repair work. No documentation exists on the article (which was an inheritance) and at the time was though to be of minimal value by the customer, according to the jeweler.
When stolen from the jeweler however, the article with no identity becomes a nine carat rare and expensive natural alexandrite chrysoberyl.
At least this is according to the appraiser who never saw the ring, but through a series of questions with the client made this determination and wrote a document stating an absolute conclusion with a value in the neighborhood of $50,000.
When contacted concerning this matter, several of the area’s top Graduate Gemologist/appraisers had turned down the proposition of providing such a document. There was no proof of the stone having ever been documented as natural and since its original place of purchase was stated to be Mexico in the 1960s, when very few nine carat alexandrites existed, the possibility of such was deemed very remote. Add to this, the fact that synthetic color-change sapphire is commonly sold as “alexandrite” throughout the world, and has created one of the most common misnomers known to the jewelry industry to date.

Well…

The case went to trial. The judge heard testimony of two Graduate Gemologists who believed the likelihood of the stone being natural was remote. The judge read the report of the appraiser saying it was natural as well as heard the plaintiff’s testimony describing the correct color-change attributes for natural alexandrite.
In the end, it was the plaintiff’s testimony that won out – a judgement in the vicinity of $50,000.
The plaintiff’s lack of tangible proof of what was owned was apparently not important. The burden of disproving what they may have had was on the defendant.
The plaintiff’s failure to hire an expert with a gemological degree was also apparently not important in the eyes of the law. Since the state of Washington has no regulations on jewelry appraisers and therefore no requirements of them, the plaintiff’s expert was considered as valid as the defendant’s.
What can be learned by this case? Most assuredly, a customer can make any claim and put the burden of proof on the jeweler. Without documentation, one might think the plaintiff had little chance. But it was this lack of evidence that worked to their benefit.
While this once again stresses the importance of proper job take-in procedures, this alone won’t solve the problem. The jeweler needs to qualify a customer’s expectations, anticipate potential problems (however remote) and act to prevent them.
It also wouldn’t hurt to utilize the services of an independent and reputable gemological laboratory when the need arises.

Phone: 425.455.0985 | Fax: 425.454.3088 | Office: 10801 Main Street Suite 105 Bellevue, WA 98004
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