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Mar 3, 2008 10:24 pm US/Central
Lawsuit Settlement Calls For Diamond Refund
DALLAS (CBS News) ―
A recent lawsuit charged DeBeers intentionally manipulated diamond prices. In a proposed settlement, the company has agreed to refund hundreds of millions of dollars to consumers around the world.
Master Gemologist, Joe Tenhagen, is one of the top diamond experts in the southeast. He said it was common knowledge inside the diamond industry that DeBeers set the price on its rough stones, and if you didn't like it you basically couldn't buy "wholesale" from anyone else.
"DeBeers controlled the world supply of rough, they dictated the price of rough and then the price of cut stones had to follow that trend because the dealers, the diamond cutters had to pay DeBeers price or they wouldn't get any rough," Tenhagen explained.
The class action lawsuit charged DeBeers was in effect a monopoly, illegally setting the price of diamonds and misleading the public. Insiders say that for years, the inflated cost of DeBeers' stones were simply passed along to consumers, who were charged more than the diamonds were worth.
To settle the case, DeBeers is agreeing to refund 295 million dollars. While most of the money is earmarked for big, commercial jewelers 135 million dollars in refunds is available to individual consumers, if they take the time to file a claim.
DeBeers Diamond Settlement
Refund Period:
Jan.1, 1994-March 31, 2006
Eligible Refunds:
Diamond Jewelry under $200: 0.5% Retail Price
Diamond Jewelry under $1000: 27.5%
Diamond Jewelry under $5500: 32%
Loose Diamonds: 59%
How It Works:
If you bought diamond jewelry between Jan. 1994 thru March 2006, you are eligible to apply for a refund.
Depending on how much you spent, you could get back between 10 to 30 percent on the retail price. If you bought any loose diamonds, refunds could approach 60 percent. But be warned, some critics believe only the lawyers who brought the case to court will see any big bucks out of this national class action lawsuit.
"It's a waste of you time nothing is ever going to come out of it," said Philip Matthew, owner of Mathew Jewelers. "Cuz 135 million divided by everyone in the county divided the number of years and the court fees nothing is going to be left for the consumer."
Consumer like Mike Stancil said he'll take his chances.
"To know that they also price gauging and ripping off the consumer," explained Stancil. "Definitely I'll hit him where it hurts."
DeBeers is facing a lot more competition from diamond mines in other parts of the world. Changing the landscape of the diamond industry should be good news for consumers.
If you want to apply for a refund you have until May to get all you paperwork filled with the court.
Buyers have until May, 19 to file a claim
click here or click
De Beers to learn more about the settlement.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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