Diamond Investment Scams : Binary Options Dealers Move into New Territory

The sales pitch is rather predictable.  The price of gold is holding steady, the bitcoin faze might very well turn out to be a bubble.  If you’re looking to invest in a real commodity that never seems to suffer any loss, why not consider diamonds?

Over the past several years, internet web sites offering investors a simple, online platform to reap huge profits in the diamond market have grown significantly.  You send them the money you want to invest, you wait for the price to go up and then, supposedly, you can sell the diamonds you bought or keep holding on to your investment, whatever suits you.  In reality, however, they will take your money and employ any one of a number of dishonest tactics to prevent you from recovering it or profiting from it.

When you are victimized by fraud, you are generally entitled to receive a refund or, in certain circumstances, apply for a chargeback.

Binary Options Veterans (Diamond Investment Scams)

According to published media reports, the rapid rise in the number of online diamond investment scams is due to the increasing number of countries that have banned fraudulent binary options sites.  Rather than close up shop for good, many veteran online binary options scammers have simply re-packaged themselves as online diamond brokers.  These are professional criminals who employ heavy-handed telephone sales techniques that have tricked countless numbers of unsuspecting individuals into sinking their hard-earned money into a fraudulent online investment scheme.

To entice those who have little or no experience in the diamond trade, therefore, they may claim to offer you the opportunity to trade fractions of diamonds, rather than the traditional whole stone, and claim that this makes a quick profit all the more likely.  Others will claim that they can deliver a larger profit because they don’t work with middlemen.  And to impress upon you that they are honest businessmen with a global conscience, they will assure you that none of the diamonds they deal in come from conflict zones.  While there are indeed legitimate online diamond brokers that actually do meet these high professional standards, all the phony ones are sure to claim to do as well.  So how can you tell the difference?

France’s Diamond Investment Blacklist (Diamond Investment Scams)

In November 2016, the Autorité des Marchés Financiers (AMF)  ̶  an independent French public authority responsible for protecting the safety of consumer financial investments  ̶  blacklisted Blue Stone Ltd., a British-registered company also trading as BE-Diamonds, which became the first ever diamond investment firm to be labeled a likely fraud by a government agency.  The AMF advised French consumers not to purchase from Blue Stone “in any form whatsoever.” Since then, the AMF added approximately 80 more online diamond dealers to its blacklist that are targeting the French public without complying with existing regulations.

The AMF noted that these scams regularly change their URLs, so the list they published is not necessarily exhaustive or authoritative.  Blue Stone Ltd., for example has also maintained at least eight other URLs.  (And for the record, a number of legitimate diamond brokerages incorporate the words “blue” and “stone” into their names and are, of course, unrelated to this particular company.)

The AMF warns investors not to respond to any inquiries that may be received from any company purporting to be marketing diamonds that is named on their blacklist and not to communicate with them or their affiliates “in any form whatsoever.”

Now that an official bi-lingual online list of phony diamond investment sites exists, check to make sure that the one you are considering doesn’t appear on it.  But again, since that list is not and cannot be all inclusive, there are several other critical factors to consider:

  • If you are “called cold,” or contacted out of the blue, either by phone or email, assume the worst
  • Confirm that the brokerage has a business address in a city that is an acknowledged international hub for the diamond industry with strong local regulatory enforcement, specifically Antwerp, New York, Mumbai, or Tel Aviv (or adjacent Ramat Gan)
  • Check if the brokerage is a member of a reputable diamond industry association, such as the International Gemological Institute, the Gemological Institute of America, the Gemmological Association of Great Britain, the Asian Institute of Gemological Sciences, or the Antwerp Diamond High Council’s Institute of Gemmology (the spelling used here reflects each organization’s own usage)

If you think you’ve been the victim of a diamond investment scam, contact the fund recovery experts at  e-assetsretrieval.

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