Marshall Byler 9/26/18 Marshall Byler 9/26/18

Pink Diamond Online Jewellery Auction Fail - Reasons to use a Registered Valuer

Imagine investing your hard-earned cash in a rare pink diamond for your Superfund, only to discover that it’s worth 2.5% of its supposed value. Megan Austin explains the benefits of having your online purchase checked by a National Council Of Jewellery Valuers (NCJV) registered valuer.

My client bought a cushion cut 0.73ct Fancy Brownish Purple-Pink diamond (Photo 1) through an online auction with supporting paperwork that seemed to tick all the boxes. One of these documents was a GIA report (see below Photo 2), dated the 1st of February 2017. Usually, if you are offered a GIA report with a purchase, you would be on solid ground. However, in this case, and unbeknownst to the buyer, the diamond was laser drilled and fracture filled sometime after the GIA report was created, drastically reducing the value of the diamond.

The second document (see below Photo 3) supplied by the auction house was a formal valuation for $95,000 that was completed by a non-registered, non-gemmologist valuer – who despite his lack of qualifications operates a Fine Jewellery Valuation and Consultancy service – stating that the diamond was worth ten times what she paid for it. These two documents together provided the basis upon which my client decided to bid for the diamond in the online auction, which she won.

In a further twist to the tale, my client says she contacted a diamond broker in Queensland, and after examining the diamond with a loupe he instructed her merely to put it in her safe until she retired. If my client had followed the broker’s instructions, she would’ve not only been paying excessive premiums for decades, but she also would have reaped absolutely no return with potentially no recourse for recovery of her funds.

Despite having the documents provided by the auction house and the subsequent discussion with the diamond industry so-called 'expert', some red flags had been raised and the buyer decided to make an appointment with me to get another opinion of the stone. After examining the gem with a loupe and subsequent testing by Spectra Gemmological Laboratory on the Gold Coast, the report confirmed that the diamond had been laser drilled and fracture filled. Not only this but it was worth about a quarter of the purchase price paid.

What is laser drilling and fracture filling? Laser drilling is a technique whereby a channel is burnt from the surface of a diamond to meet with an inclusion (generally black) with a laser. The channel is used as a conduit to allow for chemical treatment of the inclusion, usually changing its appearance from black to white. Fracture filling is a technique involving the occupation of part or whole of the diamond with a substance, e.g. glass with the purpose of making the fracture less visible.

Many may think that a valuation higher than the purchase price indicates a bargain; however, I urge consumers to beware of online purchases that come with an inflated valuation certificate. The fact is this auction house deliberately uses overstated or incorrect valuations from non-registered valuers as a sales tool; they’re designed to convince customers that they’ve got a great deal when, in fact, they are potentially overpaying. Worse, this inflated figure also becomes the figure upon which years of insurance premiums are paid.

The sad truth is that anyone can claim to be a valuer and this is not illegal; however, there are industry bodies that specialise in jewellery valuation, and it’s up to the client to choose a suitably-qualified professional. Always select a valuer who is registered with the National Council of Jewellery Valuers as they must undertake many years of formal training in gemmology and other specialist areas to become registered and then commit to ongoing education for the duration of their registered status to remain up-to-date with industry changes.

Even though non-NCJV registered valuers are not answerable to the NCJV they are still expected to comply with Australian Consumer Law (ACL) which makes it illegal for a business to engage in misleading or deceptive conduct, by failing to disclose that gemstones have been treated and are not natural, even if they didn’t intend to mislead or deceive.

Furthermore, sellers in the jewellery industry also have a responsibility to comply with ACL which states that a customer is entitled to a refund if an item is significantly different from the description. If a retailer uses a valuation misleadingly or deceptively, irrespective of whether he/she knew it was misleading then the retailer will have contravened the Act. In addition, if the valuer knows the retailer is using the valuations misleadingly and deceptively and does nothing to prevent that misuse, then the valuer may also contravene the Act as a person knowingly concerned in the contravention.

Louise Sylvan, a former Deputy Chair for the Australian Competition and Consumer Commission says “The problem for consumers is that very few consumers have the expertise to be able to determine if the gemstones they are being sold are as authentic as is claimed, and in particular, if the price they are being quoted is a genuine bargain. In short, in most cases, consumers are relying on the honesty and reputation of the jeweller”.

Even if a diamond comes with a diamond certificate from a reputable diamond grading laboratory, ensure you use a registered valuer to verify it. Also, even though the vendor may issue you with an ‘in-house’ valuation certificate, a ‘Certificate of Authenticity’ or if it has a reputable laboratory grading report – as in this case – it’s still important to have the item checked over by a professional and valued for replacement in the Australian marketplace.

Fortunately, this story has a very happy ending as my client managed to recover her funds from the Auction house, and additionally was reimbursed the cost of the laboratory report and my valuation.

To obtain a valuation on your purchase, call today on (07) 3210 1975 and let qualified experts help you.

Marshall Byler 2/26/18 Marshall Byler 2/26/18

5 tips to rate your handmade Engagement ring setting

You've just spent endless hours researching a stunning diamond for the most significant purchase of your adult life - an engagement ring. So make sure that the quality of your setting is worthy of your diamond and not just an afterthought.

You've spent endless hours researching a stunning diamond for the most significant purchase of your adult life - an engagement ring. So make sure the quality of your setting is worthy of your diamond and not just an afterthought. Ensure you choose a handmade setting that will not only compliment your diamond but will ensure its security for long term wear.

You can easily determine the quality of your setting using your eyes, a loupe and a good light source. Rotate the piece in your hand to view it from all angles and read through the following checklist to rate your jewellers job -

1. Design - Good design is the first benchmark of a quality handmade engagement ring. The mount must primarily allow adequate security for your gemstone, however, the overall design should be aesthetically pleasing, proportional and practical. The ring must be comfortable to wear everyday with no sharp edges to catch on clothing or people. When selecting a metal type, keep in mind that some metals require more maintenance than others; for example white gold requires regular rhodium plating; while platinum and yellow gold can simply be polished.

2. Manufacture - A good quality jeweller will demonstrate their technical expertise by bringing your design to life. Each component of the design should be pre-polished so as to produce a high end finish when soldered together. A quality handmade piece will have solder lines that are almost invisible to the naked eye because the joins are well aligned and are evenly filled with solder, with no ugly gaps. Lopsided or badly centred settings are a sign of poor craftsmanship and lack of attention to detail.

3. Gem setting - Preparation is the key to a top quality setting job. The mount should be carefully prepared and gems should be positioned and seated before they are securely set. Symmetrical gemstones such as squares, ovals or rectangles should be dead centre with all claws being of equal size. When examining shoulder gems, bright cut borders should be even and smooth with no rough edges while channel edges should be uniform. Gems set in a row should be consistently spaced, with no tilting or overlapping. Overlapping can cause chipping to the gemstones which will need to be replaced and reset, a costly and time consuming process.

shutterstock_69767473 (1).jpg — Gem setting

4. Finish - After construction has been completed, your jeweller should pay particular attention to the finish of your ring. Subtle shaping of the shank and setting will elevate an average piece of jewellery to exceptional. Particular attention should be paid to preparing the piece for polishing using the correct grades of emery paper, then graduating through the various types of polishing compound to produce a bright mirror-like surface. But be warned, over polishing can result in losing too much metal and detail. For white gold rings, the final stage of finishing is rhodium plating. The rhodium should be white and even, with no spotting or spilling into non-rhodium areas.

5. Valuation - Once your ring is finished, ensure you obtain an independent appraisal to verify its quality and workmanship. A valuation is particularly important if you have bought your diamond and/or setting online or overseas as it will provide a current insurance replacement value from Australia. And if your purchased diamond has a laser inscribed identification number on its girdle your valuer will verify this number against the Diamond Report.