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Kiwis are being sucked into internet jewellery scams too good to be true. What's more, buyers may unwittingly commit insurance fraud.
Auckland jewellery appraisal company Advanced Gem Laboratory has seen an increase in scams over the past two years, thanks to technology-savvy fraudsters using the web to push their products.
Precious stones, like sapphires, diamonds and rubies, are offered at low prices, backed with so-called "official" appraisal certificates. In one case, a seller claimed the ring was worth US$4000 ($5151) but sold it for US$900.
The seller alleged with the "official certificate" the customer could get the ring insured for $4000. If the buyer had insured the ring for that sum, and later made a claim, they could technically have been charged with insurance fraud.
However Chris Ryan from the Insurance Council said people who innocently made the mistake of insuring their fake jewellery were unlikely to be charged with fraud.
"We've seen about 80 cases," Bill Palmer of Advanced Gem Laboratory said. "One day, we saw five pieces of jewellery from the same internet company. People want to believe they are getting a great deal because they feel overseas jewellery is better, but it's not."
Most New Zealand insurers don't accept overseas appraisals but a few cases slip under the radar. If a jewellery buyer has certificates that appear to be lacking in quality or information it's best to go to a professional jewellery appraiser, the gem experts say.
Genevieve McGough was one unlucky Aucklander who was caught up in an internet scam. The food writer paid US$190 ($200) for a sapphire and diamond ring that came with an authentic-looking certificate from an overseas auction website. The ring had a recommended retail price of $5000. McGough discovered the advertised blue sapphire was a cheap blue stone and cut glass in the diamonds.
"I was interested in the low prices you can pay," McGough, 35, admitted. "I spent hours reading and researching the websites but I was never going to buy a ring worth thousands."
McGough was alerted to the dodgy dealings when she visited Palmer. "The ring wasn't what it was advertised to be," McGough said. "I had a huge dispute with the auction website but they couldn't care less," she said.
"They sent me four automated emails in reply, so I wrote negative feedback on the sellers' page to warn others.
"I even suggested the auction site get one worker to test each jewellery seller to ensure they aren't seen to be supporting fraudsters. But they weren't interested and, in my opinion, are condoning it."
Palmer bought the fake ring from McGough for the price she paid to show others the dangers of internet scams. McGough had also bought another ring from the website but was able to return the product for a refund.
Best advice is to stay clear of internet sellers but if the allure of cheap jewellery is too strong, avoid appraisals by overseas appraisers. Advanced Gem has a list of overseas appraisers to avoid.
"We suggest you buy your jewellery from a reputable jeweller, preferably in New Zealand," Palmer said.
