Friday, July 19, 2013

Regarding The Recent Diamond Segment on ABC News The Lookout!

For those of you who saw the recent segment on ABC News (if not, see links below) on "clarity enhanced" diamonds -- that is, diamonds that have visible cracks that are made invisible by filling them with lead-glass -- I'd like to make a few important consumer observations.

In our investigation, it was quite apparent that had ABC's reporter, Dan Harris, not been with me, the situation could have had a very unhappy ending. Had he been like every other young man looking for a better price by going to 47th street (and who, when asked about budget, often throw out a "much lower" number in the hope of getting an even better "deal"), he'd probably never have known what he had really bought, and if he did, probably not until it was too late. Whether deliberate, or the result of ignorance, the buyer, in this case Dan, was exploited and did not get what he thought he was getting.
The only way that most consumers ever really know what they have purchased in diamond wholesale districts around the world is to take them to an independent, qualified appraiser for confirmation of the facts. In these situations, what they learn may be very upsetting ... and it may get even worse.

It is rare that consumers can get a refund -- unless they've asked the right questions and gotten the answers to those questions, in writing, on the sales receipt. As shown in the ABC report, however, few people ask the right questions, or get honest answers, but there is always something in the paperwork that mentions clarity enhancement (CE). I know of two cases in which the buyers found out, after the purchase, and when the seller wouldn't refund what was paid, took the time and money to take the sellers to court ... and in both cases, the consumers lost! The reason was that the seller could show that the sales receipt indicated the stone was clarity enhanced. In both cases the sellers insisted the evidence (the sales receipts and fictitious lab reports) showed that the buyer knew what he/she was purchasing from the start; that all of the facts had been disclosed at the time of the purchase. Also, both vendors insisted the buyer had been led by the appraiser to regret having purchased a clarity enhanced diamond and that the problem was the appraisers!  Since the documentation -- the seller's receipt and lab report both indicated "CE", and since, unlike Dan, the buyer had nothing to prove what really happened, the court ruled against the innocent consumer adding that the "unscrupulous" seller was being very generous to offer to let them exchange their diamonds for something else!

Here's what breaks my heart, especially in times when people are feeling economic pressure and money is tight. Special moments are special, and people want to mark or celebrate the moment, whether it's with an engagement ring or other beautiful diamond gift. Then, to be exploited by the unscrupulous, really mars the moment...often forever. And here is where everyone loses. 

A few other points should also be made about going to 47th Street and the total experience (since so much ended on the cutting room floor).

While we found that there were people deliberately deceiving, we also became very aware of just how extensive general lack of knowledge remains among sales people "on the street" (and I might add, in EVERY "wholesale" district -- not just 47th street). In addition to the two vendors shown on-air, there were many others we COULD have shown who were equally guilty. 

The big difference between now and the segment from a few years ago is that there were also many others who did, in fact, mention "CE" the moment they heard what Dan's budget was These people actually volunteered information, explaining there are "two types of diamonds: natural and CE". This was a major improvement over the way it was a few years ago. When we asked what a CE diamond was, we were also told they "sell for less because something is done to make them look better than they do when they come out of the ground." This was also good: they acknowledged there was a reason for the lower price. 

Unfortunately, the scene broke down when we asked WHAT was done, and whether or not the diamond might change to something less pretty over time. These people really didn't know what the CE process actually was (some made it up and some said they didn't know because it was a very high tech process). And even wore, none indicated the appearance was not "permanent" and might change. But In these cases I think it was more a case of ignorance among the seller than any intent to deceive. Nonetheless, going into the heart of the "diamond wholesale" district to buy a diamond all-too-often results in buyers being denied ALL the information they NEED to make an INFORMED decision about what to buy.


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