Professional Jeweler Archive: JVC Uncovers Underkarating in New York

February 2002

Professional Insider/In the Industry


JVC Uncovers Underkarating in New York

State fines distributors and retailers


After more than a year of investigation in the state of New York, the Jewelers Vigilance Committee found two distributors and 60 retailers underkarating gold jewelry and selling it to unsuspecting customers. Millions of dollars worth of inventory was affected.

JVC reported its finding to New York State Attorney General Eliot L. Spitzer’s office, and the state subsequently issued fines totaling $125,000, paid by the guilty parties. “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,” says Cecilia Gardner, JVC executive director and general counsel. “This is not a widespread problem – but it is a very serious problem in certain places.”

JVC conducted its investigation by shopping the marketplace and doing precious metals testing. It found some jewelry was deliberately underkarated, mismarked as to karatage and sold in large quantities to retailers. The investigation was underwritten by a JCK Industry grant.

The National Gold & Silver Stamping Act allows only small variations when manufacturers alloy gold with other metals. Overall, the gold fineness of a piece of jewelry (including solder) must not vary by more than 7/1,000ths from the amount indicated in its quality mark. The act doesn’t require jewelry to be so marked, but if it is, the amount must be accurate and must appear with the manufacturer’s trademark. Retailers wishing to sell unmarked karat gold jewelry must disclose its karatage on in-case signs, tags or sales receipts.

Jewelers interested in conducting spot checks of the gold they carry can receive five free precious metals tests with their annual JVC membership. Otherwise, testing costs $15, excluding shipping.

The World Gold Council responded to the New York attorney general’s announcement by sending a press release to New York City area consumer news media. “The jewelry industry takes the laws regulating precious metal purity very seriously so that consumers are protected,” said John Calnon, senior vice president, Americas, for the WGC.

WGC advised consumers to use common sense and shop at reputable stores. “Established retailers look to buy their karat gold jewelry from select manufacturers whose quality controls and ethical practices ensure accurate karat markings,” he said. “Look for someone who is knowledgeable, offers a broad range of product and a reasonable return policy, and who may be affiliated with a professional trade association, such as Jewelers of America or the Jewelers Vigilance Committee, or the Better Business Bureau. And, as with any significant purchase, make sure you get everything in writing.”

• JVC, New York City; (800) JOIN-JVC or (212) 997-2002, www.jvclegal.org.
• WGC, New York City; (212) 317-3800.

– by Peggy Jo Donahue

Copyright © 2002 by Bond Communications