The London Diamond Bourse (LDB) has partnered with a government agency, the Insolvency Service, to deal with the issue of companies claiming to offer diamonds as an investment. The London bourse has published a document on the public area of its website to help the public avoid falling foul of “boiler room” scams purporting to sell highly lucrative investment diamonds. The consumer advice was developed by the exchange and the Insolvency Service with former chief executive officer of the British Jewellers Association, Simon Rainer, consulting for the project. The advice aims to outline the working practices of companies that mis-sell diamond investments and highlight that LDB members are subject to regulation and as such consumers are covered by redress through arbitration services.
Chris Mayhew, company investigations supervisor for the Insolvency Service said: “We work closely with a number of partners to stop unscrupulous companies ripping off vulnerable investors and welcome this initiative by the London Diamond Bourse to prevent people from being mis-sold diamonds at grossly inflated prices for investment.” Meanwhile, Victoria McKay, chief operating officer of the London Diamond Bourse, said: “With promises of high returns, talk of Swiss bank vaults and carefully worded exit strategies; investors have been duped into thinking they have made a sound financial decision and later find not only do they have a problem accessing the diamonds they have purchased, but also that the value of the stones is significantly less than the original purchase price with VAT issues in bringing the stones back to the UK. The London Diamond Bourse has been involved in this project with the sole aim of preventing the UK diamond industry from being brought into disrepute and will continue to defend the reputation of bona fide diamond dealers in the UK.”