Stamping out unhallmarked Asian jewellery sales

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A two-pronged attack is being used to educate and enforce rules.

A rogue core of UK jewellers in the Asian community are bringing disrepute to the trade by failing to comply with UK hallmarking laws, but Trading Standards is cracking down. Rachael Taylor speaks to the industry bodies carrying out a two-pronged attack of enforcement and education to fix the problem.

Hallmarking might date back to 1300, but there is a rogue core of retailers within the British Asian jewellery community that are failing to comply with laws regarding to the sale of gold jewellery, but unfortunately for those businesses the crackdown on such illicit practices is coming hard and fast.

As the price of gold has risen, levels of jewellery thefts have experienced a parallel uplift and Asian-style 24ct gold jewellery has become a hot prize due to its high cash-in value. This coupled with the explosion of the cash-for-gold phenomena has made gold jewellery a hot topic for those outwith the industry as well as within it, leading to a greater scrutiny of retail practices surrounding it such as correct hallmarking by external bodies.

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While Trading Standards has long been active in the policing of hallmarking there have been a number of high-profile cases hitting the headlines in recent months.

In June last year Wandsworth Trading Standards carried out what it believes is the biggest haul of unmarked jewellery in the UK to date when it confiscated 6,000 items of gold jewellery, with a retail value of £750,000, from Rathy Jewellers in Tooting, London.

The discovery of the unhallmarked jewellery was made during an inspection of the jeweller by Wandsworth Trading Standards assisted by a representative from the Sheffield Assay Office. What they discovered was a huge haul of unhallmarked gold. This was not the first time that Rathy Jewellers had offered up such booty – it had previously been warned by Trading Standards a year earlier about selling unhallmarked gold jewellery but failed to take the advice on board.

As a result, director Arunan Sivagnanalingham and former director Raitharan Mahalingham were charged in April with violating the Hallmarking Act 1973 at Richmond Magistrates Court. The pair were ordered to pay a total of £9,860 in fines and costs after pleading guilty to the offence.

But they were not the first jewellers to be caught out selling unhallmarked jewellery in that neighbourhood. In January, a neighbouring Tooting jeweller was fined £800 and ordered to pay £500 in costs after pleading guilty to five charges of having unhallmarked jewellery in the store. The owner of this retailer had similarly been warned about such practices prior to being taken to court.

Crackdowns by Trading Standards have not just been felt in London but have been taking place all over the country. In March, the Birmingham division raided its local jewellers and seized 104 items of jewellery, worth a total of more than £50,000, from 21 stores. Of the items confiscated 12 were not hallmarked, 19 were of a lower carat than they were being sold as and some had counterfeit branding featuring logos such as BMW and Nike.

West Yorkshire Trading Standards have similarly been carrying out spot checks with one such investigation, which was instigated by a tip off from a consumer, leading to Mangla Jewellers in Bradford being ordered to pay £1,700 in fines.

Authorities who raided the store discovered that nine out of 10 items of gold jewellery in the store were not hallmarked properly. 10 items of jeweller were confiscated and Mangla Jewellers owner Murkhtar Ahmed later pleaded guilty to 11 charges of selling unhallmarked jewellery, although he claimed in court that while the gold jewellery was not properly hallmarked it was being sold as the correct carat.

Like the other jewellers mentioned previously, Ahmed had been given previous warnings by Trading Standards; in his case he had been warned off selling unhallmarked jewellery four times before being taken to court.

The majority of sales of Asian jewellery in Britain are made by Asian retailers to Asian consumers, which has led some retailers to falsely believe that those sales, which are kept within the community, are exempt from UK hallmarking laws.

British Jewellers’ Association chief executive Simon Rainer is working with Asian jewellery community in Birmingham to help bust these myths and says that while there are the rogue traders out there, some of the hallmarking malpractice within the community is the result of a misunderstanding. “Their perception is ‘because I buy it from a wholesaler it’s got a hallmark on it, doesn’t it?’,” recants Rainer.

As part of its campaign to offer education on the technicalities of hallmarking, the BJA held an Asian Jewellery Seminar in Birmingham in association with The Birmingham Assay Office, Birmingham City Council Trading Standards, West Midlands Police, Surrey Police and the Metropolitan Police last month to talk about issues such as hallmarking, as well as security.

Rainer says that the seminar was well attended and proved so successful that he is considering running similar programs in London. He explains that the purpose of these meetings is to get engaged with the Asian jewellery community as often those retailers are not part of associations such as the BJA.

To help involve the community more, the BJA is working with people from within the communities who will act as ambassadors and set up a committee so that the jewellers will work together on issues such as promoting the use of hallmarking and keeping each other safe against any crime sprees that might pass through their neighbourhoods.

But while the BJA is doing its best to reach out to the Asian jewellery community, it cannot force retailers to attend these sessions and so only those who are already towing the line that are likely to turn up. For those who are most in need of such education Rainer says that the most effective tactic is still fear factor.

“Those who want to remove themselves from this debate are the rogue traders,” says Rainer. “All the publicity that we did before and after the event, that’s getting the message out there. And when Trading Standards did that raid [Rathy Jewellers] there was a massive jump in hallmarking of 22ct gold. They are scared.”

Birmingham Assay Office business relations manager Marie Brennan corroborates Rainer’s claim. She says that while jewellers claim to be ignorant of the hallmarking laws, whenever raids take place on jewellers within those communities there is a surge in items of 22ct gold being sent in for hallmarking from the areas that have been targeted by Trading Standards.

“When Trading Standards focus in a specific area we definitely see an increase as a result of their interest,” says Brennan. “In Birmingham from time to time Trading Standards have a blitz on the Asian Community and we do tend to see an increase in 22ct gold being submitted.”

As well as a general upwards trend in hallmarking, Brennan says that figures for individual jewellers can be quite revealing. “There are definitely some Asian jewellery businesses that will occasionally send a batch and then lapse, and then if more Trading Standards activity takes place we might see some more activity three or fourth months down the line,” she says. “It is important to say that there are a lot of Asian businesses that do work with us regularly, but there are some that don’t.”

While Trading Standards are tough with jewellers taken to court for violating hallmarking regulations, the build up can often take a long time with jewellers caught being given plenty of warnings before legal action is taken.

Sheffield Assay Master Ashley Carson has been a pioneer in pushing Trading Standards to take an interest in the violations occurring in the Asian jewellery market and he describes the process as one of leniency. “It is a three strikes and you’re out rule, I believe,” he says.

Carson is based at the Assay Office in Sheffield, which processes between 65% and 75% of all Asian jewellery hallmarked in the UK, but he travels with Trading Standards to UK cities as far away as London to assist them in spot checks on Asian jewellers, and he says that the softly-softly approach of warnings is often ignored, which is why by the time cases come to court many face high fines because there is evidence that they have been previously warned, and so have an understanding of the laws surrounding hallmarks.

Carson has worked hard over the past two years to get Trading Standards to take hallmarking seriously and believes that a lack of policing in the past has led to many jewellers becoming slack with hallmarking procedures. When he first started to approach Sheffield Trading Standards with the idea to carry out checks on retailers it answered that it was often too busy with seasonal schemes – such as fireworks checks in November for Bonfire Night or sofa foam checks in January to coincide with the Sales – to focus on it. “The problem was that while people might be getting ripped off nobody is going to die from a retailer selling them 22ct gold as 24ct,” Cason explains.

But after persevering, the scheme took off in Yorkshire and after a high-profile conviction in Bradford 18 months ago – where Carson claims that out of the 24 retailers he visited 24 were not using hallmarks or displaying the legally required dealers’ notice – other Trading Standards divisions picked up on the idea, no doubt led by the fact that each division is judged on the number of convictions it can secure and hallmarking violations have proved to be a successful path to convictions.

Many of the jewellers being caught for hallmarking violations have been trading in the UK for many years and with previous warnings under their belts it is hard to accept the excuse given by many of ignorance of the rules. There are other speculative reasons given by some observers that lead to the assumption that some jewellers are trying to sell jewellery off the books.

To date there has been little collaboration between bodies such as HM Revenue & Customs, the police and the Assay Offices meaning that while hallmarked jewellery is made official it would be unlikely to spark the interest of, say, the tax man, but this could be set to change as the departments prepare to swap notes. Carson says that he has been involved in inter-body seminars about this issue and cooperation is something that is being looked into.

This collaboration mixed with an increase in Trading Standards raids – which Carson also confirms is on the horizon – is bad news for any jewellers hoping to make cash-in-hand precious jewellery sales; regular spot checks could force jewellers to have confiscated jewellery hallmarked, or push them to pre-empt checks by hallmarking stock, but this hallmarking information could soon be used by other bodies to ensure that the same level of jewellery being hallmarked is going through the books.

The efforts of bodies such as the BJA are working to educate the Asian jewellery community of hallmarking laws and eradicate the excuse of ignorance, and with hefty fines being dished out and shops shut down for jewellers who persist in selling unhallmarked jewellery it is in every retailer’s interest to comply with the laws.

As Carson cleverly puts it into perspective, the average price of hallmarking an item of jewellery is 75p, but the cost to a business of being caught out failing to do this is considerably higher, both in court-issued fines and damage to a company’s reputation.

 

This article was taken from the June 2012 issue of Professional Jeweller magazine. To read a digital version of this issue click here.

 

 

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