Jewellery Insurance Scams and Rogue Traders - The Hall Of Shame

Yes - here it is ... the hall of shame.  Insurance companies who try to get out of paying their insured customers or simply fob them off with vouchers/spend cards/etc for shops they don't even like, rogue traders who prey on the unsuspecting customers and give them terrible products or service. Here goes

Jewellery Insurance - the things, or people, to watch out for:

1. It has to be Norwich Union - to be fair to them, they are the biggest insurer so its more likely that you are going to hear more bad things about them simply as a percent of their business
   - my advice; just make sure you read your policy and ask questions if necessary
2. iVal - this is the company that is used by many of the larger insurers to assess the loss (ie value the lost jewellery for insurance payouts AFTER the loss). If you have something by an artist who is collectible and thus the jewellery has a value above and beyond the intrinsic value of the components, these guys are going to really upset you. On several occasions they also have appeared to be less than capable of valuing the most basic high street stock
   - my advice; just make sure you find someone to value your loss who understands what it is that you have lost.
3. Barclays for using an internet only seller to replace clients lost jewellery ... what can I say !!
4. Goldsmiths the jewellers - a well respected company on the high street - for owning iVal - clearly a conflict of interests there since many of the vouchers handed out by insurers are for Goldsmiths.  Hmmmm!!
5. The NAG (National Association of Goldsmiths) Institute of Registered Valuers - For all their huffing and puffing and claiming that they are THE valuation experts, they really don't know what they are doing with soooo many things. We have been utterly horrified by some of their valuations.
   My advice; get your jewellery valued by experts for the type of jewellery you have and don't rely on NAG's registered valuers, even though they are endorsed by most insurance companies - not that such an endorsement carries any weight given the way the insurers behave most of the time.
6. Gem Labs are supposed to be impartial?  Tsch - what about Harold Weinstein Ltd who confirm what we are saying above; only they think its OK - Eh?? See this link .  To my mind, if you insure a piece for £5000 then that is its value - why are you offered £2000 in cash? 
   My advice - about this issue?  Well - I really don't know what to say other than go with a specialist insurer who will actually pay out properly; that's if you can find one.  If you do have a bespoke made ring, then the insurer is actually obliged to get the ring made by the same jeweller if they are still working due to copyright and quality reasons so don;t let them fob you off if this is the case (NB your valuation must state it is a bespoke made piece)
7. Recently Axa who claim to be using specialist experts to accurately replace your bespoke made lost jewellery ... our research suggests otherwise
 

Bespoke Jewellery Design - it is really unique and handmade?

Call me Jack

Jack thinks it time to tell the public whats going on in the UK jewellery trade with regards to the actual goods themselves. Many high street jewellers claim to be manufacturers when in fact there are only a handful of us left. Anyone can get a jewellers bench and put it in their shop and claim they are skilled when in fact they are not. Is this really a scam? I don't know. But it certainly isn't truthful. So here's a brief rundown. I'll start with normal high street shops. The small independent traditional high street jeweller.

These guys have been around for years. They are prevalent on the British high street in every town. Mostly they have "traditional" fine jewellery in their windows - lots of diamond rings all quite similar and lots of other jewellery, stones of all colours, etc all literally stuffed in the window in trays or boxes. A bling emporium.

Now if you like this, then you will be in your element. Some of these jewellers are good and honest. But unfortunately, and more increasingly, due to the market being depressed they are selling you goods at a high price which are not worth the money you pay for them. What to watch out for:

a) The jewellery

Nowdays most jewellers claim they make everything in store themselves actually don't. They might actually do some soldering and polishing, but they buy relevant component parts (there are many companies who sell those in their millions) and stick them together then set them with loose stones they have. Hey presto - rings, necklaces, earrings, bracelets all looking very similar to each other.

This is not strictly manufacturing. We can train an apprentice up to make this jewellery within 3 months. There's nothing wrong with this - it is the mass market and components, like everything else, can vastly differ in quality. So if you are asking them to make you a bespoke ring, DO ask these guys if they use components or if they actually buy bullion materials (sheet, wire, findings etc) and make each piece from scratch by hand. They may say they make everything from components, in which case ask them from which country - the honest ones will get the relevant component manual out and show you, and maybe use it to help you design your ring. BUT. You guessed it - you can buy them from abroad and get them hallmarked here in the UK. These components may be quite inferior in quality or use questionable practices in their production. Just be aware.

b) Stones

Look back in my blog for a list of common practices for treatments to enhance stones as mostly this is what these guys will show you. Again, the honest ones will be truthful and tell you the exact quality of the stones or show you a certificate if relevant. But you have to be fully aware of what you are buying and what sort of quality you are expecting if you are asking for a bespoke ring to be made up for you. Common scams are as follows:

i) Diamonds - telling you a diamond is good quality when it isn't. Search the net for examples of the "Four C's" to start with. Don't be fobbed off with statements such as "colour and clarity are the most important as cut and carat are obvious", there is a lot more to diamonds than simple explanation of the 4 C's but its a good start and you will be armed with a little understanding. If the sales assistant can't at least speak confidently about the 4 C's - walk out and go somewhere else where they can.  Above all, don;t buy a significant diamond (0.3ct or above) without seeing it first preferably with some comparisons.

ii) Coloured stones - ask about the treatment; again, if they have little knowledge of this, I recommend you walk away and give your money to someone who does. If they say the are selling you a natural untreated stone - ask for the source. They should be able to tell you as these stones are rare in the industry and usually expensive.

iii) Semi-precious stones. This is an interesting one. There are so many different qualities, treatments and so on. Try to find someone who understands your needs and has a good working knowledge of the stones. This is an area where you can be easily duped and oversold .... I might deal with this in depth later.

iv) Pearls. Watch out for these. There are soooooooo many pitfalls. The questions to ask are:

1. Are these (white perfectly round) pearls completely natural? If answer is Yes then ask

2. Are they cultured? If answer is no - unless the price tag is in excess of £20,000 ... just walk out

Why? - there are pearls called naturals, and these can be expensive, but it refers to the colours (most pearls are dyed, bleached, etc) and NOT the pearls themselves which are cultured. 99.99% of all pearls on the market today are cultured and white

If answer is No, then ask

3. How long do you think these pearls have been in production (in development in the shell)? Price will reflect this - if the jeweller says I don't know and they are selling something over £500, they should know! Usually these pearls should be in the farm for in excess of, say, 2 or 3 years. Cheaper pearls can come out of production in less than a year ... DO NOT BUY THESE PEARLS - unless you want very poor quality (also its not a nice process)

Then there are a whole bunch of other things that you need to be aware of like size, shape, skin quality, lustre and so on which will finally determine the quality and a fair price. We have seen some real horrors with these because we do a lot of repairs, restrings and valuations for pearls.

So - go in with some ammunition and you will be less likely to get ripped off by a scammer who markup is ridiculous and who knows nothing about what they are selling to you. Good luck

Jacks Back

Jack's back ...

Its been a while since my last post. Had a few things to deal with on a personal level. On a business level, I'm pleased to tell you, the customer, that there have been far fewer horror stories with insurance companies though the ones we have dealt with have been ... erm ,,, interesting. Unfortunately, as things have hotting up with the metal markets again there are now all new rogues out there to SCAM you.

Don't worry - Jack will name and shame those who deserve it. Watch out - there's a scammer about!

Jewellery insurance - jewellery valuation scams

Call me Jack

Well - a new client has asked us to value and set a diamond for her. It is quite a nice pink diamond which she bought from a direct source at what we would consider a keen price since the diamond came from the Argyl mine in Australia. Anyway, that isn't the interesting bit - what is interesting is that before finding us she went to her local jeweller and asked them to, firstly, value to stone, and then for a quote to set it (she didn't get as far as the quote though).

The local jeweller sent the stone off to their (we assume) NAG approved valuer who kept it for nearly a month while they attempted to put a value on the stone (apparently the most experienced valuer was ill was the excuse). When they did eventually manage to come back with some sort of value, it was verbal and somewhere between £1000 and £10,000. Nothing like leaving yourself a margin for error is there?? Indeed the actual written valuation seems to not note the diamond's source and values the stone at £12000. She was charged £50 for this. Needless to say, the customer wasn't very happy, which is why she came to us.

She told us this story, and also that during the attempt to value to stone they had called another shop which she had previously used to make a few jewellery repairs. They use small sticky labels on their packaging, just the sort that are really useful to secure small packages, which is exactly what she had re-used it for on the diamond package (called a wrap) to secure the diamond so it didn't fall out. Apparently, the shop had put 2 and 2 together and remembered that she had mentioned a loose pink diamond a couple of weeks earlier so they called her to let her know - the worst part of this story is what they told her.

I seems the valuation company had got someone (assume one of the valuers, a lady actually) to call the shop whose sticker was on the package and said that they had bought this particular diamond from them and would like to buy another - how much would that cost? Of course, the bewildered shop assistant had absolutely no idea what she was talking about and, naturally, asked how much she had paid for that one ... to which the reply was "no actually, lets start again, I'm a valuer and want to get a retail value for this diamond for insurance, so how much would you sell one like it for" . Bearing in mind this is a cold call to someone asking very specific questions about a reasonably rare stone, the shop found this quite irregular and probably reminded her that she was the valuer.

So what are these valuers up to? Its hard to say isn't it. Clearly they had absolutely no idea what they were doing and, after a month of fumbling, were clutching at straws. The point is - valuations on jewellery are like valuing houses. Many factors come into play, and you have to really know your market to make a good appraisal of the worth of an object. For this you need some experience and some training. Like I have pointed out in other posts, the training to become a jewellery appraiser isn't as vigorous as say, the Royal Institute of Chartered Surveyors (since we were likening it to property valuations). Most valuations are easy and have easily accessible data (like a makers mark, a year and and assay stamp of metal and approximate carat weight of stones) which makes them easy to find a replacement cost - with a couple of months doing the job a junior assistant could potentially do this. Some are not as straight forward and require more specialist knowledge and it is these that end up totally bamboozaling the registered valuers. Problem is, they don't admit their inadequacies and undervalue or overvalue the item causing major problems should it go missing or get damaged.

But is it too much trouble to ask the owner of the piece a few questions instead of calling round all and sundry and making yourself look like a fool? It didn't take us long to put a value on the stone, actually about 5 minutes since it had a clear certificate and a reference number which when we accessed it told us everything we needed to know. We also asked the client where it came from, which she was happy to tell us, that she got it from Australia - so there is only one place for a possible source, the Argyl mine. We have dealt with these types of diamonds before and this one was good quality and was worth towards the upper end of the very wide margin the first valuer had put on it verbally.

In this case, the diamond has been seriously overvalued to the tune of around 30% which means that year on year the customer could be paying 30% more than they need to for premiums and, indeed, would unlikely to be offered a cash settlement for the diamond at £12000 despite paying the premiums for that amount.

All seems like common sense to me - watch out, there are professional scammers about taking your money and putting you at risk of insurance losses through their own lack of knowledge.

Jewellery Trade Scams - Scrap Metal Refining

Call me Jack

Well, it would seem that even Jack's personal friends can get totally scammed. About a months ago we went to dinner with two other jewellers we have known for a few years. They had a particularly distasteful story to tell.

They are a husband and wife team who own a lovely shop in the East Midlands where they make bespoke wedding and engagement rings and other handmade jewellery. As such, they produce a certain amount of waste metal, which we in the trade call scrap.

So. What do we jewellers usually do with this scrap? We don't throw it away as its precious metal. We sell it to a bullion refiner, similar to those who offer money for scrap or broken jewellery on the high street. Normally, you would sell it back to the bullion dealer who sold you the metal in the first place as they will likely give you the best price on your account. However, in this case, my friends were cold called by a company called Recycling Trading Company (RTC) whose offices and refinery is in New Bond Street, London. Nice and safe, wouldn't you have thought? No - not at all - quite the reverse actually, and a scam that I am starting to hear more of committed by who we all think of in the trade as highly respectable companies.

Anyway. RTC cold called my friends and asked if they had any scrap for refining. Of course my friends initially said they always sent the metal back to the bullion merchant who sold it to them, but RTC said they could better the price. So, of course my friends said they we welcome to send their agent to collect a bit of silver scrap they had.

The agent arrived, my friends gave her just over a kilogram of scrap sterling 925 silver, which they would have sold back to the bullion dealer for around £200 on account. On the high street, from any shop taking scrap metal, you can get between £160-180 for this amount of scrap 925 silver in cash on the spot. RTC said they would pay around £20 more than the bullion merchant - so it seemed a sensible deal to my friends, who had already told RTC twice about their existing deal with their bullion merchant - so there was no mistaking the money that was expected for the goods.

Great - so if you can get an extra 10% on your silver through RTC, what can yo get for your gold and platinum? My friends were naturally expecting a cheque for £220, approximately, but to their horror one arrived for £57.50. At first they thought it was a mistake, so they phoned the company - they got a brick wall at the receptionist who wouldn't pass them on saying that all queries had to be put in writing. My friends are persistent though, so they eventually got a manager of RTC to phone them back - he said the silver melted down to around 250 grammes and that is what they had paid out on. But there was over a kilogram to start with? So what has happened? RTC stood their ground, saying that there was only 250g of actual silver in the sample. So the money remained as is, and that was that. Put any complaints in writing. Blunt as that!

As a jeweller myself, I know this is not right. I told my friends that refining has several processes to get back to pure metal: firstly a burning off of all the non metal solid particles (dust, any plastic or paper in the sample, etc) typically losing 5-10% of the weight; secondly a higher burn to melt all metal solids, losing up to another 5-15% of weight and then a separation burn at a very high temperature to separate all the alloys - now this one can bring the weight of actual precious metal (in this case fine 99.9% silver) to 35% of its original weight. A quick calculation suggested that this had been the process used.

Why is this a scam you ask? Well, on the high street you can get instant cash for 925 silver scrap of £160-£180 per kilogram. This is because the bullion refiners don't have to go past the first burn to refine it. Therefore you are going to end up with about 950g payable scrap at worst from solids or perhaps 850g if its dust. RTC must know this as they are refiners. Usually a company like RTC would pick up metal waste from dentists and so on, where precious metals have been used in fillings and are mixed with non precious metals or other materials. This sort of refining needs the high prolonged burn. Still, I'm pretty sure that RTC wouldn't pass up on getting maybe £275 a kilo for 925 sterling silver from any of their colleagues who will just refine it and sell it back into the market at treble that ... c'mon ... wouldn't they? They should know their business shouldn't they? I'm sure they do!!!!

SCAM SCAM SCAM SCAM. RTC, you are the lowest of the low. worse than insurance companies by far - your industry is shrinking due to the recession so you are preying on the trades you reply on to pick up your sales and SCAMMING them, ripping them off and then not dealing with their complaints.

I have been since told by my friends that despite 3 letters to RTC, who it turns out are owned by a French parent company called Norphone have got them nowhere and now they are considering legal action, not for the money, which is only £150 or so, but for the principle. What if it would have been gold and not silver? Their losses could have been thousands.

Shame on you RTC, Recycling Trading Company, Norphone from New Bond Street !

The Nightmare on Norwich Union Street 3 - iVal returns

Call me Jack.

Again, we are back in Norwich Union Street. This time iVal got it soooooooo wrong.

A couple of years ago, a lady bought a necklace from us by a Danish designer. This designer isn't that well known, but her jewellery is quite exclusive and can be expensive. Its all hand made and mostly one off pieces. The item in question was a large natural pearl simply mounted in a 22ct gold bezel as a pendant and put on a long thick snake chain in silver. The purchase price would have been around £200. now, as a result of the strength of the Euro and increases in gold prices, a replacement would cost say £275-300 ... thats if we can get one for her from the designer. If we make one for her, it will be at least £225.

OK, so not alot of money in jewellery insurance terms, but enough for an individual - and of course, stolen. So Norwich Union pass this over to iVal who value it at £23.

C'mon iVal - this is totally unreasonable. £23 wouldn't even replace the chain, yet alone the gold bezel mounted pendant. When will these people get it right? And why don't they?

Well - it would seem that they have a conflict. A few posts back I asked who should be allowed to appraise jewellery for insurance. I said that any organisation with an affiliation to the insurance company was a conflict of interest to the customer - you would have though that anyone affiliated to the jeweller would be baised against the insurer (giving higher valuations to pass these on to their parent jeweller) ... iVal is actually part of Goldsmiths the high street jewellers.

So why is this such a mess?

The truth is, no-one has really got any control over the insurers. Oh yes, they have a code of conduct and are answerable to the FSA in some cases but that doesn't seem to count for much. Only today we received a note from our insurers saying that our premiums were going to increase due to more thefts and pay outs and the lack of police action when jewellery is stolen. The last time I looked we are all paying for not only the right to the police action when our things are stolen but also due care when things are valued for pay outs ... only we're not getting it - any of it!

The upshoot of all this is that the industry remains unregulated, unprofessional and full of thieves - not dissimilar to politics then, eh?

Scammers abroad

Call me Jack

OK. Before we carry on with our UK jewellery insurance issues, it is probably the right time now to expose a couple of other scammers. This does impact in jewellery insurance as unsuspecting tourists buy faked, treated or poor quality jewellery or loose stones whilst on holiday for top dollar and get ripped off in the process.

This fake jewellery can even come with some pretty convincing certificates which fool the majority of jewellers when they do their own appraisals for insurance. This is not their fault, the scammers are very clever and know how the industry works. The net result is you end up with a valuation of, say, several thousand for jewellery or stones which you paid a few thousand or even hundreds for.

How does this happen?

Well. We're not just talking about passing off a Cubic Zirconium costing a few pounds as a diamond costing a few thousand pounds, the scammers are experts in their field using advanced techniques to rip you off royally. Here is a few examples of how you can be hoodwinked into parting with your hand earned cash for trash.

1. Heat treated gems (sometimes normal commercial practice but watch out for diamonds)

Many coloured gemstones are sold on the intensity of their colour. The quality and cost of the stone is usually directly related to the desirability of its colour. In many cases, colour can be enhanced by "irradiating" the gem and in over 95% of cases it actually is - this is accepted as a normal commercial practice in jewellery and may not actually class as a scam, only nobody tells you. These heat treated gems are only actually worth a fraction of that which a naturally occurring gem of the same colour intensity would be. Expensive examples of these commonly include Fancy Diamonds, Rubies, Sapphires, Tanzanites (tanzanites are actually heat treated to get the blue colour - naturally they are brown - again, normal commercial practice) Aquamarine, etc. The treatment is usually permanent though it can deteriorate if it hasn't been done right. This is not only something which happens abroad, the majority of high street jewellers in the UK carry jewellery made with heat treated stones without making this clear (this refers to diamonds mostly) when you buy them so you think you are buying the real thing when you're not. Hey, you didn't really think you could buy real natural pink diamonds or sapphires for earnest Jones prices, did you?

2. Oiled gems (normal practice for certain stones such as emerald)

To hide surface flaws in poor quality gemstones which are all but worthless they can be "oiled". This treatment infuses a resin type substance into the flaws which covers them up. On polishing the treated stones, they mimic a higher quality stone than they actually are. This treatment is not generally permanent and is commonly used with Jade, Garnet, Emerald and so on - just to be clear, its normal practice to oil some stones, especially emeralds, though some treatments are better than others. If your garnets leak colour all over your skin when it gets hot or it rains, then you'll know that wasn't really the best oiling treatment that could have been used

3. Sandwiches

Two cheap stones glued together to make one larger much more expensive stone - this is a real fake and a total con. The resultant stone is worthless.

4. Laboratory grown

Literally these are the same gem composition os one occurring naturally, so its almost impossible to tell without going back to a lab for analysis. Any gem can be grown in a lab, faked if you like. They are actually what they say they are, only instead of taking millions of years to develop under a natural process, they have taken a few months under simulated conditions. Hence their values are much much less than a natural stone.

5. Poor quality stones

Most tourists are not well versed in determining good quality stones from poor quality stones. This is just experience, and you can easily be fobbed off with something which is not worth anything like the dealer claims.

These last 4 scams are most prevalent in China, Thailand, Mexico, India, and the like. But don't be lulled into a false sense of security if you are buying from the UK, Europe, US or Russia. To compound the problem MOST high street jewellers buy in goods or have their own brands made abroad in the very countries where these scams are absolutely rife. Half the time, the company has never even met the supplier or workshop they are using. I get to that in a later blog. They just trust that the supplier is giving them the right quality. Many of them don't even know what the right quality is - you are buying into their brand image and not a quality by merit.

To compound the problem still further, some unscrupulous jewellers produce fake certificates for this jewellery and then sell it at reduced prices to make it look like a bargain.

Watch out - there's a scam about.