Follow this topicThe coloured diamonds scam
Diamonds are forever. And so is this coloured diamond scam!
It should be easy to renew my house and contents insurance. It's a very ordinary home. Instead, it's a nightmare. The phone pests don't stop. I told one company four times not to bother me, that I subscribed to the Telephone Preference Service and that I would never deal with a firm that called me even if it was the last insurer in the world.
Last year's insurer had pushed the premium up 62%. When I complained, I was told the quote was “automated”. I complained and the increase dropped to 15%. So back to the comparison site, which came up with less than half my original renewal quote – for better cover as well.
The broker phoned again – I told her, politely, to get lost. End of story? No.
The broker tried again, ignoring all I had previously said. I was polite until she said: “We have some security questions. The first line of your address? And your date of birth.” I refused.
She had called me, and if my evil twin had answered the phone, he would have known the answers.
Taking control
Why do they behave like this? Simply, asking all these idiotic questions enables them to take control. They can't do this on a comparison site.
These are all legitimate, regulated companies, selling legal, FSA-approved products. Yet in pester power, they beat the illegitimate rip-off merchants hands down. Crooks are less systematic, less organised. When they say they will call you back, it's often weeks later, if ever.
So when James, who said he was a “Swiss broker in Zurich” (presumably I am meant to be impressed) called me shortly after the insurance people, I was already in a bad mood. And that became blacker still when he attempted to control me with a large number of seemingly innocuous questions starting with the Olympics/Paralympics and football, moving on to how I provide for my household and then the inevitable discussion about my investment strategy.
I lied like crazy, but most people are truthful. He knows that taking control means I shall be more susceptible to his actual pitch.
Making a mint from coloured diamonds
Eventually, he extolled the virtues of “coloured diamonds”. I have written about these for more than ten years and I know there is no evidence that buying these stones benefits anyone other than the seller. I also know from experience that such a statement risks a flood of rebuttals from people who say they have made big money. These come, invariably, from anonymous writers – the scam merchants.
Nothing. There is no index, no standardised coloured diamond, and in any case, there is a yawning gap between what you pay and what you could sell for the next day. Where there is no market, there are no meaningful prices.
He continued: “Based on diminishing supply, experts predict dramatic price increases in the immediate future.”
Who are these experts? How many are there? Do they work for coloured diamond companies? How dramatic and how immediate? And if I had a pocket full of stones that were due to soar in value very soon, why would I be phoning to try to sell them?
He then got investment-technical. “It's a hard asset that diversifies your portfolio with security and is not affected by volatile market movements. They are not directly tied to a global market which safeguards against market uncertainty.”
So what! This diversification and zero correlation with other prices argument has to be seen against an asset which is impossible to price with accuracy and almost as difficult to sell.
And then he really took me into his confidence. “Do you know that coloured diamonds are the most concentrated form of wealth in the world? They are the safest, most discrete and condensed way to transportation [I think he meant transport] wealth in the world .
Unlike real estate and stocks [this is an American sounding script], there is complete privacy in owning coloured diamonds as their value and rarity is recognised globally and can be sold in any currency.”
Translated, this means I can get a whole load of overpriced stones in my pocket when I flee the country and that I can sell them in any street market in the world. Somehow, I don't think so!
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