WARNING: Detecting a Fraudulent Appraisal
Now that we have our new blogging platform online I thought I’d take a few minutes to relate a rather disturbing situation that we ran into late last year: a fraudulent diamond appraisal. While we posted about this on our corporate Facebook account it bears repeating here:
FRAUD ALERT – FRAUDULENT APPRAISALS
Greetings everyone. Our posts and updates are typically lighthearted, but I have a serious note for this one. Please, take the time to read it if you are interested in jewellery – it’s for your protection. Some of the details are altered to protect the identity of the victim.
Today, we had a good client ask us to make an offer on an extremely high end diamond ring with a retail value close to $50,000. It had an appraisal listing the specifications of the diamonds, sizes, carat weights and appraised value. Unfortunately, all of the diamonds in the piece totalling almost 4 carats turned out to be simulants (stones which look like diamonds but aren’t). We’ve seen fakes before, but in this case the degree of deception cost our client the value of a new Lexus SUV.
Based on this we’ve compiled the following best practices for purchasing high value jewellery.
- Any new diamond of significant value SHOULD come with an appraisal from a major lab or appraisal firm (GIA, EGL, IGI, GEMSCAN, etc). Our wholesalers don’t even stock diamonds in larger sizes without providing certificates for every sale. In this case, the appraisal was provided by the retailer on a generic unbranded certificate, and didn’t list tracking or reference numbers. In short, it could have come from anywhere and been printed by anyone.
- Appraisals should feature the credentials of the appraiser, including their gemological accreditation at the bare minimum.
- They should clearly detail the shape, size, dimensions and clarity grades of all major components.
- MOST IMPORTANT, when you purchase something of this value get a second opinion or at least independent verification. Kelowna has a number of quality new and estate jewellery stores who would probably be happy to help protect you. The origin of the fraudulent appraisal is out of Vancouver which has no shortage of reputable stores who could have given a second opinion.
Jewellers are much like doctors, lawyers and insurance agents. The public places their trust in our abilities because the skill set to identify and deal in precious metals and stones is so specialized. When a firm erodes that trust it tarnishes the industry as a whole. Unfortunately, this incident probably won’t lead to an arrest because the fraud happened half a decade ago.