The London Diamond Bourse, in a joint initiative with the Insolvency Service has released a note advising consumers on the working practices of companies that purport to offers diamond as an investment. The note comes in the wake of a rising number of incidents of people being missold diamonds and precious stones, the Bourse said in a release on January 26.

The statement says that in virtually all such cases, the stones do not exist or are being sold at hugely inflated prices – it is not uncommon for prices in excess of 15 times the correct value being charged.  Moreover, the customer is often persuaded to house the non existent diamonds in a Swiss bank vault in order that the sale is not subject to UK VAT.

It adds that there are now companies offering to help those affected by offering recovery services to attempt to recoup previously sold diamonds or monies, and warns that these offers can often be an extension of the scam.

The Bourse said that to date, it had not received a complaint regarding any of its members being involved in such practices. It urges consumers to be wary of the fraudsters and says that LDB or Action Fraud could be approached for help in such cases.