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Articles from DIAMOND JEWELLERY (983 Articles), INDUSTRY ASSOCIATIONS (263 Articles)










   Diamond Exchange is an online retailer
Diamond Exchange is an online retailer

Diamond Exchange woes continue

As the problems of online diamond retailer Diamond Exchange mount, an increasing number of consumers are taking action.
After news reports about the online diamond jewellery company’s financial difficulties, including an application in the Victorian Supreme Court for the business to be wound up, the Jewellers Association of Australia (JAA) has been inundated with more consumer complaints, most seeking refunds.

Since the initial 10 complaints that first alerted the JAA to the problem with its member, a further 19 cases totalling a combined $190,000 in refund claims have been brought to the attention of the industry body.

One Victorian consumer is seeking a full refund of his $32,000 diamond ring that has not been delivered. The problem could be worse than currently suspected too – the 29 cases Jeweller is aware of are just the ones that have been brought to the attention of the JAA. It is believed Diamond Exchange is dealing with many others.

Jeweller has also received many calls and emails directly from members of the public seeking advice, with one customer claiming that after considerable time delays he had not only received a partial refund from Diamond Exchange but also negotiated compensation.

The consumer, who did not want to be named, explained how he had purchased a diamond engagement ring and matching wedding band for $12,000 in April and paid a $10,000 deposit to Diamond Exchange.

After many delays he was forced to cancel the engagement party, scheduled for early August, because the ring would not be delivered in time. The order was then cancelled and he sought compensation from Diamond Exchange due to airfares having to be cancelled by guests that were due to attend the party.

He claims that a settlement of $3,000 was reached on top of the purchase price but that he still didn’t receive it. Last week, he visited the Diamond Exchange office to try to retrieve the money in person. He said the office was closed but his persistent banging resulted in staff opening the door and after discussions with Diamond Exchange a $10,000 EFT was made with a further $5,170 refund to be paid this week.

Another consumer explained to Jeweller that they had been waiting for their diamond for more than seven weeks, even though the company promised a 14-day delivery. “We have been told [by Diamond Exchange] four times the diamond ‘is about to arrive’ but it never does. The lack of customer service has been absolutely shocking. No one calls back and we have chased and chased and emailed and emailed and they just keep promising,” the consumer said.

The Diamond Exchange difficulties first came to light when Jeweller discovered that the Jewellers Association of Australia (JAA) was considering taking action against the company after a spike in consumer complaints about the business.

JAA chief executive Ian Hadassin confirmed he had been dealing with consumer complaints about the company concerning two things; the late delivery of product and a lack of refund or the length of time taken to refund money for items that had been returned.

The JAA quickly began working with consumers and Diamond Exchange to expedite refunds last week, Hadassin believed all refunds had been made but since the reports have been published many more consumer have contacted the JAA.

Hadassin said he was aware that Diamond Exchange had reopened for business on Friday and had had further discussions with company officials.

Speaking last week, and at the time of announcing the business would close for two days – it was eventually closed for four days – chief financial officer Simon Middleton said he believed all refunds were now complete and there had been no new claims. “Obviously with adverse publicity we might get some [new claims] but all existing refunds have been followed up,” he said.

Diamond Exchange’s problems with its customers coincided with a creditor making a 519G application on September 15 to wind up the company. If successful, the application would mean forcing the company into administration and possible liquidation.

Middelton explained that the debt was to a marketing company for media consultancy work, some of which is disputed. However, Supreme Court documents seen by Jeweller state that Timothy Stanford of Morgan Trusscolt Capital (MTC), who is claiming an amount of $235,923.38 relating to a loan agreement entered into in October 2009, made the application.

MTC has appointed insolvency specialist Romanis Cant, a Melbourne-based firm of chartered accountants.

ASIC records now show that on September 21, after the wind-up application, Diamond Exchange registered the resignation of an officeholder and subsequently a change or cessation of the company officeholders – meaning a director or company secretary has changed.

The JAA is now considering lodging a formal complaint with ASIC and the ACCC.

In addition Hadassin said, “We are advising those consumers who have contacted us that the solicitors for the petitioning creditor who has instituted winding up proceedings are Garland Hawthorn Brahe Lawyers. If other creditors want to appear they should contact or get lawyers to contact them and let them know that they will be standing in line to be substituted as a creditor if his client settles.”

At the time of publication, Jeweller's phone calls and emails to Diamond Exchange had been unanswered.

*** UPDATE - Tuesday 28 September, 3.15pm ***
Jeweller has been informed by the Jewellers Association of Australia (JAA) that:
1.   The JAA has published a message on its website (jaa.com.au) about Diamond Exchange Ltd. 
2.   The JAA has advised those consumers who are still owed money to contact the lawyers representing the petitioning company seeking to wind up Diamond Exchange Ltd. 
3.   The JAA has advised Diamond Exchange that the JAA Board will vote at the Board meeting on 1 November 2010 to cancel its JAA membership unless Diamond Exchange can show cause why it should remain a member.
4.   The JAA has advised Diamond Exchange Ltd that a formal complaint has been lodged with ASIC. 

The Jewellers Association of Australia can be contacted on 02 9262 2862 or info@jaa.com.au.
 










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