Australian Consumer Concerned about Certification, Valuation

Jewelers take notice: a survey recently conducted by the Diamond Certification Laboratory of Australia (DCLA) revealed that nearly 70 percent of consumers do not trust their jeweler and think they are being ripped off.

This alarming statistic comes on top of recent case studies brought to its attention claiming that bogus certificates from unqualified laboratories were used to overvalue diamonds.

According to the DCLA, although this practice is prevalent all over the world, it seems particularly rampant in Australia, perhaps due to the fact that the country has never had a diamond   bourse to regulate the local industry until recently.

Roy Cohen, the lab’s managing director, commented, “There have been many cases where a jeweler’s valuation, which isn’t independent, has been highly biased, showing significantly overstated grading of the diamond… We receive diamonds submitted by consumers on a weekly basis where the grades are overstated, treatments undisclosed and synthetics passed as natural.”

“This means that the consumer may be overpaying upon purchase and subsequently on insurance for their item. There may also be issues for the buyer if they try to resell at a later date when it’s all too late…The damage this causes to consumer confidence is huge.”

The issue is less with the retailer and more with the certification of the diamonds, according to Cohen. He cited a recent case in which a diamond came with a “laboratory certificate” that gave the wrong grading. In turn, the jeweler valued and sold the diamond at some $20,000 more than its real worth.

The DCLA later certified this stone correctly, along with the GIA (Gemological Institute of America) when the jeweler protested, and the money was eventually refunded to the customer. This is being cited by the DCLA as an example of “deceitful traders in our industry [that] are causing consumer mistrust.”

Jewelers are being encouraged by the DCLA to check the credentials of the lab from which a stone’s certificate is issued. “It’s up to the industry to promote ethical practices and educate buyers on what to look out for in order to try and improve consumer confidence,” said Cohen.