JVC instrumental in underkarating lawsuits in New York

The Jewelers Vigilance Committee (JVC) was involved in an effort find and prosecute several New York-based jewelry companies who were underkarating their products.

“Thanks to the involvement of the Jewelers Vigilance Committee (JVC), the State of New York has successfully brought enforcement actions against a number of jewelry firms throughout the state,” says New York State Attorney General Eliot L. Spitzer. “Fines totaling $125,000 were paid in these cases, from retailers and distributors.”

These suits were a direct result of hard work, broad-based shopping, precious metals testing, extensive research and the JVC Precious Metals Testing Facility, says Cecilia Gardner, JVC executive director and general counsel. JVC found that two distributors and 60 retailers, throughout the state of New York, were underkarating items and selling them to unsuspecting customers. Millions of dollars worth of inventory was affected.

“Our investigation showed underkarating present in the New York marketplace,” Gardner says. “The problem is prevalent at smaller independent retail outlets located in areas where people are shopping for discount merchandise. We first determined the scope of the problem by shopping the marketplace and doing a lot of precious metals testing. During our investigation, we found that some jewelry was being mass manufactured deliberately underkarated, mismarked (as to karatage), and sold in large quantities to retailers, then reaching an unsuspecting public.”

She continues, “Every time a consumer buys an underkarated piece of jewelry, their pocket is being picked. They are literally losing a few karats and a few dollars on each piece-paying for what they believe is 14k that is actually 12k or 13k gold. Or, purchasing what is represented as 10k gold that is 8k, in reality. The net effect is millions of dollars worth of fraud and profit for the manufacturer at the expense of retailers’ reputations and the consumer’s wallet.”

Funding for the underkarating investigation was provided by a JCK Industry Grant. JVC applied for a grant to conduct an underkarating investigation in 1999 and conducted the investigation throughout 2000 and the early parts of 2001.

Gardner says that JVC has long been a guardian of the jewelry industry’s ethics and integrity, and she cites this underkarating lawsuit is one example of the difference the organization makes. “This is not a widespread problem-but it is a very serious problem in certain places. We want to ensure that the integrity of the entire industry is not compromised by the actions of a few. This was one reason why we took this case to the authorities,” Gardner says. “The JVC assists the industry in policing its own-that is consistent with our mission-and we will continue to do so with anyone who is breaking the law.”

JVC regularly tests precious metals for the industry. JVC members receive five free precious metals tests with their annual membership. Regular testing runs $15, excluding shipping. Last year, JVC tested more than 1,000 pieces of jewelry.