The following is a news story by KOMO 4 news reporter, Herb Weisbaum, which NGL was consulted on:

Counterfeiters capitalize on ‘Tiffany’ name
By Herb Weisbaum

Watch the story

When it comes to fine jewelry, no one shines brighter than Tiffany. So when Sarah VanGrunsven was deciding a Valentine’s Day present she had her heart set on a Tiffany chain and heart pendant. “She’d mentioned that she’d found a few online that were reasonably priced and, of A real Tiffany pendantcourse, you know that sounded good to me,” said Lee Van Grunsven.Lee wanted to surprise his wife, so he went online while she was asleep and ordered the chain from the tiffanyjewelry.us web site. “The website said that it was the true, legitimate Tiffany’s,” said Lee, who spent $89 for the bracelet — a good price since it’s listed for $190 at the Tiffany store. “A few days later I saw it was a being shipped from China and I was like, ‘uh oh.’ This might not be legit like the website says it is.”When the package showed up, it was a counterfeit chain and pendant in a counterfeit Tiffany bag. “They never responded to any of my e-mails of course, because they knew that they were caught that they were sending a knockoff,” Sarah said. Lee couldn’t stick his Valentine with a cheap knockoff, so he went to a Tiffany store and bought the genuine chain. But just what do you get when you wind up with a fake? It starts with the bag. On a real bag the “Tiffany” label is embossed, but with the fake it’s just printed on. And when it comes to the actual jewelry, Gemologist Audrey Forrest of the Northwest Gemological Institute had no trouble telling them apart. “Tiffany does take a lot of care to make sure theirs is manufactured with precision,” she said. “They obviously use a cheaper process in the counterfeit.”Tiffany engraves its heart pendant, and the counterfeiters don’t. There’s also a big difference in the chain links. Tiffany uses a perfect round shape, but the counterfeit uses non-symmetrical egg-shaped links, which are cheaper to make. “The Tiffany bracelet which sells for $190 would appraise for $190,” Forrest said. “This bracelet which was sold on the fake web site for $89 is really not worth the Tiffany that’s on there. You’re looking at a $50 to $60 bracelet because it’s just a silver bracelet.”Tiffany says it tries to shut down web sites selling counterfeit jewelry, but cleary it can’t stop them all.So, how do you protect yourself? Just remember this: Tiffany never has a sale, and it doesn’t have an outlet store. There are no specials, and no discounts. If you’re dealing with Tiffany, it’s full price.

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 find it amazing how little confidence some consumers have in their traditional home town jewelers fearing big retail mark-ups, while being perfectly willing to hand over their money to strangers on the internet or television.
True, having a physical store for you to shop in and hold actual merchandise carries more overhead than a virtual store, but what most consumers don’t realize is that many of the on-line and on-tube stores aren’t always saving you money. In many cases you are getting ripped off.
Before I alienate the legitimate virtual jewelers, let me say that there are some. The legit sites tend to offer GIA and AGS laboratory certificates on their diamonds and have a reasonable return policies. When the seller has a restrictive or no return policy, avoid them. If you are buying from an individual, maintain similar options, but remember most internet jewelry is being offered by dealers whether they represent themselves as such or not. E-bay transactions are notorious for misrepresentations often backed by fraudulent documents.
So, why not include your local bricks and mortar jeweler when price shopping with other sources? Many who buy loose stones elsewhere, end up at their local jeweler to set it, so give them an opportunity to provide it as well You may be pleasantly surprised with their response.
Wherever you buy, make sure your selected appraiser (that would be us) checks out your purchase and provides documentation for insurance.

Independent gemological laboratory. Sounds authoritative, even clinical (why do you think we use it?). We see a lot of “laboratory certified” jewelry and loose stones but not often enough accurate descriptions. And, while we have reported on bogus labs for years it still is aggravates us to see the blatant misrepresentations made all the more prevalent by the internet.
In 2006, the most outrageous cases have involved represented retails at levels several times reality and grading of diamonds that can only be viewed as fraudulent. Still, many buyers blissfully accept any representation they are given and find out the truth far too late to do anything about it.
So the trusting often get ripped off and the skeptical come to see us. Each year, a bigger portion of our business is in verifying or refuting prior documentation. All too often, that representation is wrong, even if by a reputable sounding laboratory.
Most gemological laboratories have a threeletter call sign, like GIA, AGS or NGL and it can be confusing to the consumer who are the good guys and who are not. If they all sound the same, and their documents often do look the same, it’s thought they must be equal. Unfortunately, we even see labs with good looking websites touting their expertise while presenting bad paper on diamonds and jewelry.
It pays to investigate the reputation of the lab doing the gemological documents for your gem or jewelry purchase. Are they well-regarded within the industry, referred by others or only seen only in internet transactions. As mentioned in this year’s op-ed article, always have the right to return merchandise and have your own (well-researched) appraiser look at the article in question before keeping it.

Every week someone’s new internet “bargain” comes in for appraisal and every week I shake my head over the blatant misrepresentations out there on the web, particularly e-bay.
Much of the public thinks that any official-looking “appraisal” validates an item’s authenticity and value. WRONG. I routinely see fraudulent grading and value statements up to ten times a realistic retail value. The money spent is often close to my appraised value, meaning you got what you paid for but no bargain.
There seems to be no end to the number of “labs” creating paper for some unscrupulous jeweler (yes, most of the sellers aren’t individuals but within the trade). The “labs” ought to be taken to task as well as the sellers who know the real value of what they sell.
It really hit home a few months ago when I got a call from an individual who was buying something on e-bay with an “NGL” certificate. Since I had not dealt with the stated jeweler and do not do “presale” appraisals for the trade, I was obviously curious. Well, National Gemological Laboratory had provided the document (I have seen several more since) and either I am losing my gemological bearing, or they grade two to three grades higher than GIA standards!
But I can only look at one case at a time. There are several reputable dealers on the internet—they have web sites (not just e-mail addresses), customer support, return privileges, etc. There are a couple of old adages I would like to leave you with. “There’s one born every minute” and “If it’s too good to be true….”

Ted

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?

Yes. The problem is you don’t know which until you check them out. We have had some very happy clients who purchased over the internet – and some very upset ones.
In one instance, the client received an appraisal which failed to clearly state that they were buying a clarity-enhanced (fracture-filled) diamond, and the value stated was three times higher than what was paid. The NGL appraisal placed the retail value close to what was paid with prominent disclosure of the enhancement process. On the other hand, we have verified many great purchases, especially when GIA or AGS was the certifying lab and everything checked out.
We have also seen a lot of misleading colored stone transactions on-line. The biggest area seems to be in the emerald market, where stones too light to pass as emerald are being sold as “Colombian emerald”. True, they may be Colombian in origin, but cannot be gemologially classified as emerald if not at least medium-light in tone. On the other hand, many colored stones bought on-line price out significantly more than their transaction price – but remember, price is not the most important factor anyway. The best advice is to obtain a guaranteed refund if not satisfied.

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