Nearly 70 per cent of consumers do not trust their jeweller and think they are being ripped off, a survey shows.
The survey by the Diamond Certification Laboratory of Australia (DCLA) said this alarming statistic comes on top of recent case studies brought to its attention where bogus certificates from unqualified laboratories are used to overvalue diamonds.
"There have been many cases where a jeweller's valuation, which isn't independent, has been highly biased, showing significantly overstated grading of the diamond," Roy Cohen, managing director DCLA says.
"This means that the consumer may be overpaying upon purchase and subsequently on insurance for their item. There may also be issues for the buyer if they try to resell at a later date, when it's all too late."
In one recent case, a diamond was brought with a "laboratory certificate" which gave the wrong grading and in turn the jeweller valued and sold the diamond at some $20,000 more than it should have been.
DCLA later certified this diamond correctly, which was challenged by the jeweller, but was subsequently confirmed by the Gemological Institute of America (GIA) - the world's leading authority in diamond grading.
The jeweller had to refund the money to the consumer.
"This case study is one of many cases brought to the attention of the DCLA where consumers are misled about the real value and grade of their diamond," Mr Cohen said.
"It would seem that a few deceitful traders in our industry are causing consumer mistrust."
The Independent Grading Certificate is produced prior to the stones being set, and is different to a valuation, which is often written up by the jeweller after the stones are set and imperfections are hidden.
But Mr Cohen said the certificate was only as good as the laboratory it comes from, and he advised the credentials of the lab should be checked.
"It's up to the industry to promote ethical practices and educate buyers on what to look out for in order to try to improve consumer confidence," he said.
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