Last week Jeweller reported that eBay had closed a jeweller’s personal account because he informed the site that some of its traders were possibly breaking the law by their use of jewellery valuations. Jeweller has been contacted by a number of other people who have different, but related stories about eBay’s jewellery sellers.
Managing director of Sydney-based supplier Surfsands Gus Johnson has had his own run-ins with eBay gemstone sellers. He believes that not only is eBay fraught with misleading information surrounding jewellery, diamond and gemstones descriptions, but some sellers are deliberately misleading jewellery buyers to the website.
He explains that while recently using eBay, he purchased a gemstone from an eBay seller in Thailand. The stone was described as being “3.66 carats, rarest gorgeous colour changed natural alexandrite VVS”.
Johnson won the bid but when the gemstone arrived he says the stone was not natural alexandrite. It was, according to a leading Sydney gemmologist who examined it, a synthetic (man-made) sapphire (corundum).
“I knew straight away it was a fake when I saw it,” Johnson says, “but I thought I would let my colleague check it out, too.”
He immediately confirmed Johnson’s suspicions; it was a synthetic gemstone.
Johnson says it was his first time purchasing on eBay and he used his PayPal account to conduct the transaction. When the man-made stone was delivered, he contacted PayPal to alert them of what he described as “false advertising”.
He says his complaint stemmed from the item’s description and explained to PayPal that there was nothing ‘rare’ about synthetic sapphires, as Wikipedia reports that in 2003 the world's production of synthetic sapphire was 250 tons (or 1,250,000,000 carats).
He also highlighted the term “VVS” which is a grading standard used for describing the clarity of diamonds. However, he admits that in recent years the term has crept into the industry to be used by some to describe the clarity for coloured gemstones. However, synthetic stones are never graded to the diamond grading standard.
“No sooner had I won the bid when a new stone of somewhat similar description appeared in the same ‘slot’ where my stone had been. Talk about efficiency!” Johnson says.
False advertising
He says PayPal responded quickly to his complaint by opening a “Dispute Resolution” on 7 December between himself and the seller. At the time of publishing, the seller had not contacted Johnson or responded to the Dispute Resolution in PayPal’s Resolution Centre, although a time limit of 21 December had been set by the organisation.
“They [PayPal] began the dispute resolution based on ‘mis-description’ because, as I explained, the description of the item didn’t match what the seller in Thailand delivered.
“I’ll just to have wait and see if they respond before December 21,” Johnson says, adding that he doubts there will be any correspondence.
He says he is concerned that sellers like this one will tarnish the industry.
”We’ve all heard stories of people who have fluked a great bargain, like buying an old oil painting at a flea market that turns out to be priceless.
“I’m concerned some people will be tricked into thinking the same thing about these gems.”
He says consumers who conduct some quick research can find that, for instance, a 2-carat white diamond should cost thousands of dollars. But they find one on eBay that they believe to be “real” and bid on it, maybe up to a few hundred dollars, only to find that it’s not real.
“This is bad for our [jewellery] industry and eBay. I’m worried they will say things like: ‘all jewellers are crooks because they will be very disappointed and, I would think, angry. They could also stop trusting eBay.
“I would think it would be in eBay’s best interest to stop this sort of thing happening by not allowing these descriptions for man-made stones.
“It’s not like they don’t know the difference,” he says, referring to the distinction eBay makes between natural stones and synthetics within eBay’s jewellery search engine.
“Statements like: ‘buyer beware’ etc shouldn’t really apply here. At the very least, the stones are being advertised using misleading information which is against the law and if the seller knows that the information is misleading then it’s fraud,” he adds.
“It is quite clear to me that the seller is knowingly misleading buyers and no country allows man-made stones to be sold as natural,” Johnson says.
Australian law
The business activities of eBay Australia and its sellers would be covered by the Australian Consumer Law (ACL), which is part of the Competition & Consumer Act.
Section 18 of the ACL deals with misleading or deceptive conduct and states, “A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive” while Section 29 covers false or misleading representations about goods or services.
Under Section 29 it is illegal for a person in trade or commerce “to make a false or misleading representation that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use.”
But wait, there’s more …
In further correspondence, another reader has alerted Jeweller readers to be wary of dangerous practice some buyers believe can be encountered on eBay – shill bidding.
More widely known in Australia and New Zealand as “phantom” or “vendor” bidding, it’s used by the seller to artificially inflate the price of a certain item and/or generate greater interest in the item.
The seller would usually get a friend or family member to bid on the item in question so that it looks like the item is more popular than it actually is, sometimes the seller may also use a second eBay account to increase the price of the item often up to a genuine bidders maximum amount.
If the shill bidder accidentally wins an item, the winning bid is retracted and the item is offered to the genuine at his highest bid.
Shill bidding is prohibited by eBay.
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