London Diamond Bourse Combating Investment Diamond Scams

The London Diamond Bourse (LDB) together with a U.K. government agency called the Insolvency Service, aims to deal with the issue of companies claiming to offer diamonds as an investment which then turn out to be worth far less than originally suggested.

The London exchange is placing a document on its website for the public with the aim of helping them not to fall for scams ostensibly offering highly lucrative investment diamonds.

The advice was put together by the bourse and the Insolvency Service with former chief executive officer of the British Jewellers Association, Simon Rainer, who consulted for the project.

The advice aims to outline the working practices of unscrupulous companies that offer "diamond investments". It also states that that LDB members are subject to regulation, meaning consumers are covered by redress through arbitration services.

Victoria McKay, chief operating officer of the LDB, 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.”