WARNING! Enchanted Diamonds Scam! Buyers Beware!

[Garry H (Cut Nut)]

Companies like James Allen and Blue Nile negotiate exclusive agreements on their diamonds, giving them exclusive rights to sell the diamonds listed on their websites. They earn this exclusivity from their vendors because they sell a lot of diamonds and invest millions of dollars photographing millions of diamonds. Those 2 account for more than $500M a year from cutters and wholesalers. But B&M retailers and other wholesalers can buy and sell those diamonds too.

Enchanted were listing thousands of diamonds without the knowledge and consent of the diamond owners, but did so anyway. This is part of the reason why many of their customers were told a diamond was unavailable, then offered other options. By limiting access to their diamond certificates, James Allen made it harder for Enchanted to market diamonds that they shouldn’t have been listing in the first place.

Rare Carat is one search engine that seems to have directed a lot of business to Enchanted and a few other websites with similar business models. When they launched they were scraping listings from most online big vendors and sending a bill to all the various vendors on a per click basis. Eventually many of those leading online retailers that originally listed on Rare Carat site asked their names to be removed. Rare Carat ‘helping people find the best deal’ and avoid getting ‘ripped-off’, has accomplished the opposite.

The issue isn’t limited to Enchanted or Rare Carat. Any company, operating on low margins and low volume, showing diamonds without the knowledge and consent of the diamond owners while using customers money to buy diamonds is walking a very thin line. Too many returns, one month of bad sales; one valuable diamond chipped during the setting process; or one large chargeback from the credit card company, and that’s it – you’re done. Enchanted is probably not the last of the ‘low price' retailers to disappear.

Be careful when buying from non-trusted and non-vetted vendors.

 

[the_mother_thing]

Interesting perspectives here from Martin & Garry. Makes me wonder - if/when the rest of ‘these types’ of diamond sellers go under - will JA restore regular lab report viewing by customers again.

If THAT is the reason they did it, I can kind of understand it. But they alluded to it being more about what their ‘average’ customer (not PSers) seem to want/demand. Anyway, don’t want to get sidetracked with that convo in this thread. But the comments piqued my interest enough to comment on it. I agree with Martin; honesty - even when embarrassing or uncomfortable - is always the best policy.

 

[Bron357]

Hi Everyone. It's Martin from USA Certed. My assessment of the situation with ED is that they may have gotten into some dilemma with the bank and had funds frozen leaving them in a virtually helpless situation. However, I believe in full transparency and disconnecting phone lines is not the way to go. Explain to your customers the situation so that they fully understand and you would be surprised how customers can be understanding in the face of an unfortunate event that ED did not ask to happen. I truly hope that this matter resolves itself with compassion and dignity from all parties involved. ​

Hi Martin, while we all hope this is the case unfortunately other evidence indicates that ED has closed and the principals uncontactable.
Apart from the phone being disconnected and frantic clients being unable to get an response by email or web chat, the CEO from Rare Carat actually visited the business premises and found the office closed and emptied out.
Staff were apparently told last Wednesday to not come in / find new jobs and one has stated he is owed around $5,000 in back pay. He is also unable to contact the owners.
While ED in 2017 and 2018 seemed to be operating well, given the numerous positive client reviews, that seems to have changed by March 2019. There are very few “positive” reviews after this and this might be a combination of both less than happy clients but moreso I believe “less” clients.
It is an interesting offer that was offered by ED in late April / May. In exchange for glowing client reviews tagged across social media, after 120 days the client was to receive up to $1,500 rebate off the setting purchase.
I would interpret that as an overly generous way of marketing the business and generating new clients. The 120 day “wait” obviously gave ED the benefit of great marketing and huge positive social “vibe” without currently costing them anything at the time. This being opposed to say an upfront 10% discount.
Obviously no client at this time has made it to the “120 day mark” to benefit from this offer and at least 2 affected clients (paid but no diamond/ no ring) said this offer encouraged them to go with ED as it meant even better cost saving.
My suspicion is that ED has significant cash flow problems by March this year. Their outgoings exceeding their incomings. They were probably hoping to “trade their way out” and the “delays” in completing orders was probably due to money sent by clients being spent elsewhere and older orders being eventually completed using newer clients monies. It’s possible that a combination of James Allen removing their certs off line (meaning the benefit of shopping with an agent like ED reduced) the new MMD offers and generally a slowdown in the jewellery/ engagement ring market caused their business to falter. Their margins were always slim and so they needed continuing high volume to succeed.
The tragedy is that the engagement ring business is an emotional one.
It is usually the first (and only) time a huge sum of money, often saved over many years, will be spent on what is usually a woman’s most special and important piece of jewellery.
The engagement ring, that symbol of two people deciding to “join up” and become a team, create a family. A symbol of promise and a great future.
Any type of scam or financial loss hurts and is hard to bear but this type of loss, even moreso.
My heart hurts so much for these people.

 

[lydial]

I am curious if anyone has an FBI connections since the AG office has not been interested in pursuit of the criminal. Did ED clean out the bank account that was holding the payments from the theft victims, or is it still there - the FBI could put this on hold.

 

[DiamondGal28]

In reading through this thread it appears that a lot of people paid with bank wires. Has anyone thought to ask their bank to file a SAR report on this business? One could argue that there are money laundering implications with these transactions. It might get the attention of the FBI or FinCen. Just a thought in an effort to help...

 

[diamondseeker2006]

Companies like James Allen and Blue Nile negotiate exclusive agreements on their diamonds, giving them exclusive rights to sell the diamonds listed on their websites. They earn this exclusivity from their vendors because they sell a lot of diamonds and invest millions of dollars photographing millions of diamonds. Those 2 account for more than $500M a year from cutters and wholesalers. But B&M retailers and other wholesalers can buy and sell those diamonds too.

Enchanted were listing thousands of diamonds without the knowledge and consent of the diamond owners, but did so anyway. This is part of the reason why many of their customers were told a diamond was unavailable, then offered other options. By limiting access to their diamond certificates, James Allen made it harder for Enchanted to market diamonds that they shouldn’t have been listing in the first place.

Rare Carat is one search engine that seems to have directed a lot of business to Enchanted and a few other websites with similar business models. When they launched they were scraping listings from most online big vendors and sending a bill to all the various vendors on a per click basis. Eventually many of those leading online retailers that originally listed on Rare Carat site asked their names to be removed. Rare Carat ‘helping people find the best deal’ and avoid getting ‘ripped-off’, has accomplished the opposite.

The issue isn’t limited to Enchanted or Rare Carat. Any company, operating on low margins and low volume, showing diamonds without the knowledge and consent of the diamond owners while using customers money to buy diamonds is walking a very thin line. Too many returns, one month of bad sales; one valuable diamond chipped during the setting process; or one large chargeback from the credit card company, and that’s it – you’re done. Enchanted is probably not the last of the ‘low price' retailers to disappear.

Be careful when buying from non-trusted and non-vetted vendors.

Wow. I recall an earlier discussion regarding ED selling diamonds that they didn't have a right to, however, I am not sure I fully understood the scope of that and the relationship to JA's decision to limit info. In addition, RareCarat does hold some responsibility, IMO, since they were profiting by recommending ED.

 

[kponefive]

Hi does anyone with a legal background have access to https://www.pacer.gov/ to look up if Enchanted Diamonds declared bankruptcy?

 

[Bron357]

As always it’s a fine line between “fraud” and “business incompetence leading to bankruptcy”. Frequently businesses go bust owing people money or goods but rarely does this constitute a “criminal activity”.
The ability to sell (and buy) online has presented many business with a great opportunity to prosper. It can mean lower overheads and business operating costs and buyers love this because it means cheaper prices for them while the seller is still making money.
But there is a dark side.
It costs little run a website full of beautiful photos of diamonds that the vendor doesn’t actually own or hold. And it’s very “handy” if it’s other vendors who pay the costs, make the effort of photographing, getting GIA reports, etc so ED and similar can just “copy and paste” the images and details to their own website. Obviously with industry contacts they know who the diamond wholesaler is (if the diamond is virtual inventory) and once they get the client - by undercutting what they already know the other vendors are listing the diamond at - they then proceed with the purchase. Obviously this didn’t always go their way, diamonds already sold by the time they got to the diamond and/or instances having to tell the client “the price has gone up”.
This would be why James Allen and others who invest the time and money into photos and reports have taken their “intellectual property” from the “public domain”. It to protect their business, to stop others from snatching away their potential clients, it’s not to deprive clients of information.
As consumers we are like to sit in our PJs and window shop from our couch. Mr Google is our close friend, his lovely search engine helps us be easily wowed by slick marketing, photos, testimonials and social media presence.
It’s easy for us to send off a quick email query or start a web chat and oh so simple and quick to send vast sums of money to someone without getting dressed or getting up off the couch.
As consumers in the “on line” age, where business is done via a keyboard and the vendor is miles if not States or even Countries away, we need to be careful.
We need to know where the item we are buying is located, who actually owns and holds the item and if the person or company we are dealing with is only a “drop shipper” or an “agent”. It matters.
When we pay for things that we aren’t receiving into our hands at the time of money exchange, we need to protect our money. We can do this by paying with Credit Card or PayPal. We can use Escrow.
Online companies go bust every day of the week. Many businesses run on tight margins and a few hiccups and stuff ups can render them insolvent quickly but if we buy from reputable companies, companies that have assets, have established premises, have long market history and we protect ourselves by paying using methods that have security / recourse if we don’t get our item, we will be able to enjoy shopping in our PJs while sitting on our couch.
And when we do get up to get dressed, we won’t find out we have lost the shirt from off our back.

 

[Paul-Antwerp]

Wow. I recall an earlier discussion regarding ED selling diamonds that they didn't have a right to, however, I am not sure I fully understood the scope of that and the relationship to JA's decision to limit info. In addition, RareCarat does hold some responsibility, IMO, since they were profiting by recommending ED.

You probably remember me bringing up the topic a few times some years ago.

I alerted to retailers in possession of diamonds, on consignment from Antwerp cutting-houses, being confronted with clients finding the same diamond listed by ED, at prices lower than the cutting-house was wanting to sell them. Asking the cutting-houses, they had never even heard about ED.

When I brought it up on PS, I was disregarded and questioned and I was told to give proof or shut up. As time had passed by by then, searching proof again would have taken me too much time, so I chose to go silent on the matter.

Feeling sorry about that now. Feeling very sorry for the people who now risk to lose money. But wondering to what extent various advisory sites also carry a moral responsibility.

Live long,

 

[AV_]

the same diamond listed by ED, at prices lower than the cutting-house was wanting to sell them. Asking the cutting-houses, they had never even heard about ED.

Who was expected to take the loss?

Just curious

 

[Paul-Antwerp]

Which loss? The specific listed stones could not be sold by ED.

But it left an impression of ED being the cheapest. Bait-and-switch, possibly?

Live long,

 

[AV_]

Indeed ...

@Paul-Antwerp I was failing to find some trace of fair intent between the lines & had to ask.

 

[fp92]

Stonealgo has posted an update with some useful information: https://www.stonealgo.com/blog/update-for-users-regarding-enchanted-diamonds/

 

[Rockdiamond]

I remember that thread well Paul. We were both bringing up the same points and in return were both attacked. Its important to stress that this is still happening. A price which is clearly too low should be a dead giveaway.
Sites that refer buyers to given sellers do so for a fee. There are generally no effective vetting procedures in place.
BBB actually falls into this category to some extent. To become an "accredited business" on BBB one must simply pay a fee. I feel terribly for those who've been badly affecte .

 

[Swirl68]

But wondering to what extent various advisory sites also carry a moral responsibility.

Or legal?

Couldn’t help but notice how quick RC was to set up that complimentary legal representation team for those affected and that he was first on the scene to see that the office was cleared out. But then again, maybe he’s just being a stand up guy trying to help where he can.

 

[Swirl68]

I remember that thread well Paul.

I wish I did, but I’ve not been around that long I guess.

I read Garry H’s post and thought CR** why have I not heard this before? The whole JA thing is suddenly making some sense now.

 

[kponefive]

Or legal?

Couldn’t help but notice how quick RC was to set up that complimentary legal representation team for those affected and that he was first on the scene to see that the office was cleared out. But then again, maybe he’s just being a stand up guy trying to help were he can.

Yeah, who knows, but looks genuine. I asked a lawyer (who checked and confirmed he did not see a bankruptcy filing for Enchanted Diamonds btw) if we can sue Rare Carat, and he sent me their terms and conditions which he said are standard for a search website and are pretty clear:

7. Interactions with Other Users.
1. User Responsibility. You are solely responsible for your interactions with other Users and any other parties with whom you interact, including all Jewelers; provided, however, that Rare Carat reserves the right, but has no obligation, to intercede in such disputes. You agree that Rare Carat will not be responsible for any liability incurred as the result of such interactions, including any discrepancies as to the pricing of the diamond and gemstone listings by the Jewelers.
2. Release. You acknowledge and agree that Rare Carat merely provides a means for Customers to browse the listings of Jewelers and book Appointments with those Jewelers. Rare Carat does not have any control or authority over any Customers or Jewelers, or the pricing or sale of any diamonds or gemstones by Jewelers, and that Rare Carat is not responsible for their actions, inactions and omissions, and disclaims liability for actual, direct, indirect, incidental, or consequential damages caused by the Jewelers. You hereby release Rare Carat and its successors from claims, demands, any and all losses, damages, rights, and actions of any kind, including personal injuries, death, and property damage, that is either directly or indirectly related to or arises from your use of Rare Carat Properties, including but not limited to, any interactions with or conduct of other users, Jewelers or any purchase or sale of any products of any other user of any kind arising in connection with or as a result of the Terms or your use of Rare Carat Properties. If you are a California resident, you hereby waive California Civil Code Section 1542, which states, “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which, if known by him must have materially affected his settlement with the debtor. The foregoing release does not apply to any claims, demands, or any losses, damages, rights and actions of any kind, including personal injuries, death or property damage for any unconscionable commercial practice by a Rare Carat or for such party’s fraud, deception, false, promise, misrepresentation or concealment, suppression or omission of any material fact in connection with the Website or any Services provided hereunder.

 

[cflutist]

I wish I did, but I’ve not been around that long I guess.

I read Garry H’s post and thought CR** why have I not heard this before? The whole JA thing is suddenly making some sense now.

@Swirl68

Here is the link to the thread where @Rockdiamond , @Paul-Antwerp and other vetted PS professionals were attacked

https://www.pricescope.com/community/threads/cut-score-on-enchanted-diamonds-website.221988/

 

[cmd2014]

The whole thing starts to look shadier and shadier the more that comes out. Rare Carat is not looking innocent in any of this either tbh. It's a bit of a shady business model to charge to advertise links to websites of people who they know are stealing intellectual property from other vendors, doing bait and switches, and who knows what else given that they don't vet the vendors involved, on top of absolving themselves of any legal responsibility for business dealings done by the sites that they promote.

Although now that I think about it...this is probably the business model of every internet search engine. I can't honestly say that I'm not aware that Google takes payment to put people's pages on the top...

 

[whitewave]

Or legal?

Couldn’t help but notice how quick RC was to set up that complimentary legal representation team for those affected and that he was first on the scene to see that the office was cleared out. But then again, maybe he’s just being a stand up guy trying to help where he can.

I think it’s both.

 

[JT123]

T

Although now that I think about it...this is probably the business model of every internet search engine. I can't honestly say that I'm not aware that Google takes payment to put people's pages on the top...

True.No payment is needed for SEOs.
Companies do pay for ad-clicks(PPC advertising on Google).

 

[kponefive]

True.No payment is needed for SEOs.
Companies do pay for ad-clicks(PPC advertising on Google).

fwiw thats what the lawyer said - it's like google or expedia

 

[Hiyunglee8]

Pricescope is a for-profit discovery engine. They certainly are not to blame when customers have a negative experience with one of the vendors on their platform. Why would it be any different for others?

This is a horrible situation and the focus should be on helping those affected by it. Not playing the blame game. Diamond industry is highly competitive and has been facing declining margins for years. Fingers can be pointed throughout the entire supply chain.

Hopefully this event will lead to some solutions to prevent this type of situation from ever occurring. However, in every industry there are bad actors and there is only so much you can do to combat and prevent that.

 

[JT123]

Pricescope is a for-profit discovery engine. They certainly are not to blame when customers have a negative experience with one of the vendors on their platform. Why would it be any different for others?

This is a horrible situation and the focus should be on helping those affected by it. Not playing the blame game. Diamond industry is highly competitive and has been facing declining margins for years. Fingers can be pointed throughout the entire supply chain.

Hopefully this event will lead to some solutions to prevent this type of situation from ever occurring. However, in every industry there are bad actors and there is only so much you can do to combat and prevent that.

Most online diamond internet vendors offer bank wires. I don't see bank wires offered outside of that-other than buying a home. I agree.I hope some solutions are put into place.

 

[Phee1]

My story illustrates how emotional an engagement ring can be. We got engaged in 2009, while my then, boyfriend, was playing bridge at the world championships, in Sao Paulo ,Brazil He was going to propose, and we were to pick a ring together. Unfortunately, just after he proposed, he developed swine flu (H1N1), went into a coma for 4 weeks, and nearly died. Due to many complications, we were nearly bankrupt, so a ring was out of the question. We saved up for the last 10 years, I did months of research, and using rarecarat.com convinced me that I not only had a "great deal", but it was smart to save money by wiring the purchase price. (The $1500 rebate, was a good incentive for going to Enchanted Diamonds) Now, we're out $11,430 My husband still wants me to have a ring, so he bought one at a local jeweler, for $12,000 using a credit card TEN years we saved up, only to have our money taken, and NOT ONE WORD from Joshua What kind of person steals from people, knowing what a heightened emotional state they're in?


(QUOTE="Bron357, post: 4565284, member: 75027"]Hi Martin, while we all hope this is the case unfortunately other evidence indicates that ED has closed and the principals uncontactable.
Apart from the phone being disconnected and frantic clients being unable to get an response by email or web chat, the CEO from Rare Carat actually visited the business premises and found the office closed and emptied out.
Staff were apparently told last Wednesday to not come in / find new jobs and one has stated he is owed around $5,000 in back pay. He is also unable to contact the owners.
While ED in 2017 and 2018 seemed to be operating well, given the numerous positive client reviews, that seems to have changed by March 2019. There are very few “positive” reviews after this and this might be a combination of both less than happy clients but moreso I believe “less” clients.
It is an interesting offer that was offered by ED in late April / May. In exchange for glowing client reviews tagged across social media, after 120 days the client was to receive up to $1,500 rebate off the setting purchase.
I would interpret that as an overly generous way of marketing the business and generating new clients. The 120 day “wait” obviously gave ED the benefit of great marketing and huge positive social “vibe” without currently costing them anything at the time. This being opposed to say an upfront 10% discount.
Obviously no client at this time has made it to the “120 day mark” to benefit from this offer and at least 2 affected clients (paid but no diamond/ no ring) said this offer encouraged them to go with ED as it meant even better cost saving.
My suspicion is that ED has significant cash flow problems by March this year. Their outgoings exceeding their incomings. They were probably hoping to “trade their way out” and the “delays” in completing orders was probably due to money sent by clients being spent elsewhere and older orders being eventually completed using newer clients monies. It’s possible that a combination of James Allen removing their certs off line (meaning the benefit of shopping with an agent like ED reduced) the new MMD offers and generally a slowdown in the jewellery/ engagement ring market caused their business to falter. Their margins were always slim and so they needed continuing high volume to succeed.
The tragedy is that the engagement ring business is an emotional one.
It is usually the first (and only) time a huge sum of money, often saved over many years, will be spent on what is usually a woman’s most special and important piece of jewellery.
The engagement ring, that symbol of two people deciding to “join up” and become a team, create a family. A symbol of promise and a great future.
Any type of scam or financial loss hurts and is hard to bear but this type of loss, even moreso.
My heart hurts so much for these people.[/QUOTE])

 

[whitewave]

Pricescope is a for-profit discovery engine. They certainly are not to blame when customers have a negative experience with one of the vendors on their platform. Why would it be any different for others?

This is a horrible situation and the focus should be on helping those affected by it. Not playing the blame game. Diamond industry is highly competitive and has been facing declining margins for years. Fingers can be pointed throughout the entire supply chain.

Hopefully this event will lead to some solutions to prevent this type of situation from ever occurring. However, in every industry there are bad actors and there is only so much you can do to combat and prevent that.

@Garry H (Cut Nut)

 

[OoohShiny]

I'm afraid I am not able to add anything useful to this thread but I am crossing my fingers that all those who have lost money and emotional investment are able to get things made right in the end.

 

[Rockdiamond]

Pricescope is a for-profit discovery engine. They certainly are not to blame when customers have a negative experience with one of the vendors on their platform. Why would it be any different for others?

This is a horrible situation and the focus should be on helping those affected by it. Not playing the blame game. Diamond industry is highly competitive and has been facing declining margins for years. Fingers can be pointed throughout the entire supply chain.

Hopefully this event will lead to some solutions to prevent this type of situation from ever occurring. However, in every industry there are bad actors and there is only so much you can do to combat and prevent that.

I need to point out a HUGE difference.
Although PriceScope does offer advertising ( banners) it's not a requirement to spend money for a trade member to be able to participate.
PS also has a diamond database- but unlike the referral sites, consumers can discuss the offerings- and get a multitude of opinions. Trade members can't make specific comments on specific stones or vendors- but there've been countless cases where trade members were able to add important information without breaking that rule.
With the referral sites ( or BBB) a trade member has to pay to be either accredited ( BBB) or even seen ( other referral sites)

 

[aranciata]

I need to point out a HUGE difference.
Although PriceScope does offer advertising ( banners) it's not a requirement to spend money for a trade member to be able to participate.

I'm fairly sure you need to pay Pricescope to show up in the search engine.

Garry, been a member here and embarrassed by the way you and other long time members are politicizing what happened to these people to help your business. We all know that James Allen and Pricescope have a financial relationship.

Your search engine is a direct competitor of Rarecarat with a similar business model. By the way the vendors who pay to list here often list the same GIA number stones as Blue Nile and James Allen in the same way. Example:


Please let this thread be focused on helping those affected by this disaster.

 

[LLJsmom]

I'm fairly sure you need to pay Pricescope to show up in the search engine.

Garry, been a member here and embarrassed by the way you and other long time members are politicizing what happened to these people to help your business. We all know that James Allen and Pricescope have a financial relationship.

Your search engine is a direct competitor of Rarecarat with a similar business model. By the way the vendors who pay to list here often list the same GIA number stones as Blue Nile and James Allen in the same way. Example:


Please let this thread be focused on helping those affected by this disaster.

I don’t see where there is any politicizing. Pricescopers, whether they have purchased from ED or not, are upset about these events and are proactively also trying to figure out ways how to become more informed and prevent others from being “taken” again. Nothing wrong with that. Even if it may not work, trying to suppress people is usually a fruitless effort.