Gold under-carating: fact or fiction?
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The issue of gold under-carating seems to be a contentious one at the moment – depending on whom you speak to, it is either rife in Australia or it is almost non-existent.
In one corner is Jewellers Trade magazine, which continually publishes articles about the need for hallmarking and the prevalence of gold under-carating. In the other corner are industry experts who are not aware of any evidence of the matter.
Over the past 12 months Jewellers Trade has led the charge on the perceived or real issue of under-carating, and its July 2010 edition makes some strong – yet unspecified – allegations of illegal misconduct.
One story claimed, “Under-carating is an issue in the jewellery trade... The recent increase could be attributed to the high price of gold..., Portable Analytical Solutions (PSA) suggests.”
The story did not provide any information about the increase – such as from what previous level to what new level. In fact, the story provided no evidence about the “increase” at all.
However, the magazine’s editor, Lee Abrahams, indicates it’s much worse. She wrote, “You will read some interesting stories this month and under karating [sic] is still looming. Some horrendous stories, 24K being only 8K, Korean gold bracelet stamped Italian made.”
Interestingly, the magazine contained no “horrendous stories” or even further details of the examples Abrahams gave.
But an investigation by Jeweller has established that not only is there very little evidence of under-carating of gold, but the company that is reported to have provided evidence of a “recent increase” denies it ever made such claims.
PSA marketing and business development manager Wayne Roberts confirmed that he spoke to Jewellers Trade but insisted he provided no such evidence of an increase in under-carating, and was surprised PSA had been used to support the magazine’s claims that illegal under-carating was rife.
Roberts explained that PSA is not even involved in testing or monitoring gold standards in Australia – the company merely distributes a range of metal testing equipment. “We certainly have not purported ourselves to be the experts or a company that you go to that monitors this type of thing,” he said.
As part of product demonstrations to new clients, PSA had come across some examples of under-carating but Roberts said the company was certainly in no position to advise whether under-carating was increasing, given that PSA had conducted only 20 to 30 tests in the past 12 months.
JAA chief executive Ian Hadassin is also unaware of many examples of misconduct in the trade and confirmed that Jewellers Trade – a JAA member – had not brought any examples of under-carating to the JAA for the jewellery body to investigate.
“If Jewellers Trade or anyone else has evidence of under-carating of gold they should bring it to the attention of the JAA or the ACCC. If there are 'horrendous stories’ I would love to see the evidence of that,” he said.
Hadassin explained that the JAA occasionally receives complaints, but that the most recent investigations had proved to be unfounded.
“We have done tests on behalf of two consumers who have complained about gold under-carating and we had a retailer member complain about a supplier member which we tested. All of the tests have proved fine [no evidence of under-carating],” he said.
Australia’s two largest buying groups, Showcase and Nationwide, also deny that they’ve heard anything of the “horrendous stories” of under-carating reported on in Jewellers Trade.
Showcase managing director Michael Mishevski said, “We haven’t seen any evidence of under-carating. We are looking to do some spot checks and random assaying of product in our stores, but nothing has been brought to our attention and there’s been no complaints.”
Similarly, Nationwide’s Colin Pocklington confirmed he was unaware of any significant examples of under-carating. “If they [Jewellers Trade] have evidence of under-carating they should be reporting it to the JAA or the Department of Fair Trading,” he said.
Pocklington added, “If the magazine has this evidence, then by not reporting it they could be accused of helping to cover up misleading conduct. Anyone who has evidence of misconduct should immediately report it to the JAA.”
Both Pocklington and Mishevski sit on the JAA Board.
Peter Beck, managing director of Australia’s largest precious metal casting supplier, was equally perplexed by the allegations of serious misconduct in the trade.
Like Pocklington, Mishevski and Hadassin, Beck was adamant he had heard no such claims of under-carating in the Australian industry, “Maybe I have my head in the sand or I’m just not picking up the message, but I do not see any problem of any great proportion of under-carating of jewellery in this country.
“If it is happening it is a very serious issue. I would ask them [Jewellers Trade] to bring it to the JAA.”
Beck is also a JAA board member and said he cannot remember the last case of deliberate misconduct by an Australian supplier.
“I have not struck or personally know of a case [of under-carating] for close on 20 years,” he said, adding that it would be “commercial suicide” for any supplier to under-carat.
He stressed that the trade lives on reputation. “If someone were to be maliciously doing that they’d put themselves out of business so quickly, it’s not funny,” Beck said.
Jeweller tried to contact both Abrahams and Jewellers Trade’s co-owner, Jeremy Keight, but neither had responded as Jeweller went to press.
Interestingly, Keight also works for Euromounts Australia – a major advertiser in Jewellers Trade and a company that endorses the push for a UK-style gold hallmarking standard in Australia.
Posted August 26, 2010