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| March 24, 2005 • ISSUE 8 / VOLUME 1 |
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Jewelry fraud can often be avoided
How to get legitimate appraisals
Jewelry is generally insured for unverified values. The value is usually based on a sales receipt or sometimes an appraisal. Many times the values and descriptions are vague, inflated and lacking the actual total value paid by the consumer.
"Jewelry fraud can happen to anyone – to the consumer at point of purchase, to the insurance company at the time of binding the policy and especially at the time of loss," notes Brenda Reichel, president and the graduate gemologist and appraiser for Carats and Karats Fine Jewelry in Honolulu. "Fortunately, there are a number of things the consumer can do to avoid bad appraisals."
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| Brenda Reichel |
To begin with, Reichel says, jewelry should have an appraisal by a qualified appraiser. A qualified appraiser is someone who possesses proper credentials by recognized appraisal organizations, and also has been trained as a gemologist or graduate gemologist by the Gemological Institute of America.
Next, the appraisal must be in writing, and signed by the appraiser, she adds. Verbal appraisals should not be accepted, and any appraisal should have the valid signature of the appraiser, not a rubber stamp.
Reichel also offers the following tips for avoiding jewelry fraud:
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The appraiser must provide a thorough, detailed document that would supply a third party with all the pertinent information. Be aware there are appraisal organizations that require nothing more than paying a fee for a certificate.
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The insurance appraisal should state it is only for insurance purposes and for the replacement of the item only. No other purpose or function should be on the document.
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A professional appraisal should include in-depth descriptions of the jewelry, including:
- The millimeter dimensions, quality, weight, and identification of each stone and a description of small stones or group of stones.
- Cut, color, clarity and carat weight of the diamonds.
- For colored stones, it should include the hue, tone and saturation, intensity, transparency, and clarity.
- For pearls, the report should describe the luster, nacre thickness, color, shape, blemishes and whether they're natural or cultured.
- Identification and assessment of the workmanship of the metals used in the mounting. The trademarks, hallmarks, along with engraving that is on the item (14kt, 18kt, 585, 750, 925, Plat, Irid, etc.)
- A photograph of the item.
- The estimated value of the items and applicable tax. If the item was purchased in a foreign country any applicable duty that would be involved in replacing the item should also be included.
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Be cautious of appraisers who charge a percentage of the value for the appraisal rather than an hourly or carat weight fee. This is disallowed by the Internal Revenue Service and is unethical by most professional organizations.
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The appraiser should complete (and give you a copy of) a detailed appraisal-take-in form, which includes a description of the items, along with an estimated value while it is with the appraiser. Once the appraisal is completed, the actual appraised value will cover the item for insurance while in the possession of the appraiser.
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Keep the original appraisal with the policy. Make sure the appraiser keeps copies of the documentation. Read and examine the jewelry to make sure the documentation accurately describes the item.
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Jewelry fraud is a costly occurrence in the jewelry and insurance industry, Reichel points out.
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"Jewelry missing any type of marking at all may not be a precious metal, but gold plated or gold filled," she explains. "The diamonds may be imitation, cubic zirconia, glass or another type of simulate called Moissenite. Currently, Moissenite is being sold fraudulently across the United States. Numerous jewelers, consumers, and secondhand dealers have been ripped off by this new synthetic material nationwide, including Hawaii."
For more information on jewelry or appraisal fraud, Reichel can be reached at (877) 593-8122. Her e-mail address is flawless@lava.net.
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