Gem scam account: Gem deals are too good to be true
August 21, 2000
The local press has recently reported several cases of foreign tourists being duped by jewellery scams. Generally, the ploys used, as reported by the victims, are quite similar. The following are stories of two tourists who reported their bad experiences in the crooked gem business.
On May 28, this year, my partner and I were walking up to the Golden Palace late in the day. We knew the palace was closed as it was after 5 pm. While looking at our guidebook, we were approached by a man who said he was a chemistry student at a university; he talked for about 20 minutes, asking us about London and teaching us Thai words.
He then said that "today was a special holiday" and that tourists could buy gems without incurring tax. He said we should go to Wat Inthrawihan, where we could observe prayers, not something one could normally do, and he persuaded us to let him get us a tuk-tuk as he could get it cheaper because he was Thai.
We went to the temple and looked around and then went back to the tuk-tuk. However, the driver directed us to go and look again and we were then approached by another man. This man said he worked for the government, and was here with his mother, who had come to buy gems. He then told us a story similar to the man at the Golden Palace, and said his friend from Newcastle, England, came every year to take advantage of this offer. He said we could sell the gems in London and make a profit of 150 percent.
We went with the tuk-tuk driver to the shop, Thai Royal Gems, where we were given refreshments. The man there told us the same story. He said that because they didn't charge tax, we couldn't pay by credit card, only cash. They arranged for a saleswoman to accompany us back to our hotel so we could get our passports and credit cards. She then took us to two different cash exchanges to draw out cash on our cards, amounting to 144,000 baht.
We got back to the shop at 8 pm and were presented with three different diamond and sapphire sets. We were told we could sell them to Tiffanys Jewellery Shop in the UK, and the Thai shop would pay for them to be delivered to our home address.
The saleswoman then took us out to dinner and paid for our taxi home. It wasn't until we had just got out of the taxi that we saw a notice describing the "gem scam" in Bangkok. We went straight to the Tourism Authority of Thailand (TAT) police, who said they could not help us until we had the gems back from London, but we could expect a full refund..
We returned to the tourist police, with the gems, on July 5, and were told that the shop's manager would be arriving in the afternoon. We went back at 2 pm, but it was just a messenger who arrived saying we could only get a 90 percent refund, but not until July 15.
We argued with this man and he said his boss was coming from the shop. Another guy turned up offering us an 80 percent refund if we would come back to the tourist police the following day. On July 6 we returned but were told by the first man that there was no money to give us until July 15. He then said he might be able to give us 10,000 baht, but later refused.
We are very upset that the tourist police have not given us any support in this matter, and that they talked about us in Thai to the men from the gem shop and laughed at us.
Over the past few visits to the police station we have encountered many other tourists who have been tricked in this way by the Thai Royal Gems Shop, some of whom have returned to the shop for a refund, and have been treated in a very threatening way.
It appears the police do nothing and the gem shop continues to make extortionate amounts of money selling fake jewellery.
On the way to the Golden Palace, a man who said he worked for the government approached me. He told my partner and myself that the palace was closed; we knew the palace was closed so we did not suspect anything.
He told us that day was "Buddha Day" and that tuk-tuks were only allowed to charge 20 baht for three hours. He told the driver to take us to the temples that were open to have a look. We got to Wat Inthrawihan and an official guide, who was wearing identification, approached us.
This guide talked about the temple and was with us for 45 minutes. He eventually told us how he was a student who paid for his education through a government scheme which allowed people to buy gems, without paying tax. He then told us that tourists could buy them also and that that day was the last day of the sale.
We were told that the place to buy was the "Expo Centre", which we believed was a large building for international trade. When we got to the gem store a very friendly gentleman greeted us and offered refreshments. We were not alone at any time, and were offered a gem set, which we were told was guaranteed by the government to be worth twice what we would pay, and he gave us an address in London were we could sell it.
We were then taken by car to our hotel to collect our passports and credit cards, and then taken to Bangkok Bank, where we took out a cash advance for 192,000 baht.
We were told that we could have a full refund and that the Thai government would stand behind the value of the gems.
Only when we left the shop and were allowed to speak freely did we realise that the whole thing was a scam. We immediately went to the tourist police, who told us to go to the airport to intercept the package. We did this and were told that a refund would be no problem.
We went to the TAT headquarters and were told that we would have to wait on the representative of the store. A man came with whom we had to argue for two hours to get to the man whom we thought was the boss (but was not), and these men were allowed to use the police station as freely as they wished.
We were promised that we would get an 80 percent refund the next day. The next day we were told that we would get nothing, and that we would have to return to Bangkok on the 15th to get our money back. We spoke to many other people in the exact same situation who had given over similar amounts of money. There were ten to fifteen people every day with the same problem and the police did not care or do anything about the matter.
A member of the TAT staff walked out of the station and kicked a cabinet and said that the whole place was so dirty he would have to leave. We spoke to people whose lives were threatened, and a Japanese girl who was assaulted at the store, and nothing was done by the police.
Outlook Consumer contacted the Tourism Authority of Thailand concerning these jewellery scams, the problems involved, solutions and related issues. The following was the reply from Pornthip Onnoom, the director of the Tourist Assistance Centre.
The Tourist Assistance Centre would like to inform you that as the gems and jewellery products of Thailand are renowned worldwide for their quality, a large number of tourists love to buy them for their own personal possession and/or as souvenirs. However, there is a group of people who use the fame of Thai gems and jewellery for their own benefit.
They work as a gang to persuade tourists to understand that Thai gems have an exaggeratedly high value. These people also claim that any items bought from the gem shops recommended by them will make a good profit if the tourists resell them later when they return to their countries. Tourists, believing in those words and seeing it as a worthy investment, fall victim to the gang.
WHY DOES THE JEWELLERY SCAM LINGER?
This issue is still a problem that has not yet been solved although the TAT has tried each and every method suggested. The reasons for this are as follows:
1. There has been no law or measures to control both the quality and the price of gemstones or set gems. The responsibility for control then falls to gem shop operators or jewellery manufacturers. This leaves a gap for selfish operators to take advantage of and sell costly products to tourists.
2. Gem shops offer competitive commissions to their agents, who successfully persuade and bring in tourists to buy products from their stores. This increases the price of those purchased items.
3. Directly responsible organisations have not yet passed strict and effective measures or laws to penalise the shops.
4. Tourists do not pay attention to related documents publicised by the TAT.
5. Tourists aim to make a profit for themselves by reselling the purchased items.
Furthermore, in accordance with the constitution (1997), all gem shops have the freedom to conduct their business and are completely qualified to register or cancel their operations with the Department of Commercial Registration at the Ministry of Commerce. It is beyond the TAT's authority to suspend their registration.
WHAT HAS BEEN DONE SO FAR TO DEAL WITH THE GEM SCAM?
The TAT has continually searched for solutions to this problem. We organised a conference with related organisations such as the Tourist Police Division, the Department of Commercial Registration, the Revenue Department, and the Office of Consumer's Rights Protection to request their cooperation.
The conference was also aimed to exchange information and find solutions for the problem. At present, the TAT has established both active and passive procedures to prevent this problem from happening in the future.
The TAT has published documents, namely, "Essential Precautions" and "Advice for Tourists Travelling in Thailand" to be distributed to tourists in various places.
The Immigration Office has also been asked to hand out "Advice for the Visitor", which is displayed on the Web site . We also supported the establishment of the Jewel Fest Club, which is an alternative for tourists who wish to purchase standardised gems. The club also guarantees to refund money to tourists under its stated conditions.
As for tourists who have already bought items, the TAT has requested cooperation from the Tourist Police Division to liaise with shops. In practice, the negotiations for returning purchased items and refunding the money are troublesome since there is no law controlling gem prices. The shops argue that the sale has been finalised already. Therefore, it is difficult to take legal action against these shops. Gem products and gold ornaments are not under the control of the Consumer's Rights Protection Act BE 2541 (1998).
However, if tourists discover later that purchased items are fake, this is illegal. Tourists must press charges against the shop within three months after the shop is made aware of the wrongdoing. In cases when the products are real, but the cost is unusually high, the civil law does not apply as there is no standard price for gems, unlike other consumer products. Still, negotiations to return the products to the shops can be conducted. A refund, on the other hand, is denied. A customer can resort to civil law to have the matter resolved.
As for shops that have been closed down and reopen under a new name, the Tourist Police Division informed us that there is no law or regulation to force these shops to be responsible for any problems from their previous operations. This is an advantageous gap for shops to continue duping tourists.
For more information on legal action, please contact the Tourist Police Division on 678-6800-9 or the Tourist Police Service Centre on 1155.
Kindly rest assured that this matter has been given close attention by both the TAT and the Tourist Police Division. We sincerely hope that, with all cooperation rendered from related organisations, the problem will soon be solved.
The TAT also enclosed some of their documents aimed at helping tourists not to be deceived by gem scams. The following is a brief, edited version of one leaflet:
If you should encounter any of the following ploys, it is more than likely a scam is being perpetrated.
The sales pitch is made near a monastery on the street by a tuk-tuk driver. Be wary of any encounter that ends up requiring your presence in a gem shop.
Buying gems or jewellery to resell at double or triple the purchase price is an impossible proposition under any circumstance.
Make price comparisons in various places before deciding to buy. Never be in a hurry.
Never mail sapphires or other precious stones. Take them with you.
Do not believe special sales of any kind. Reputable dealers hardly ever offer sales.
There are no promotions, shows or special sales on jewellery authorised by the government or any official agencies at any time of the year.
The government does not own, operate, subsidise, or authorise any jewellery stores.
Many shops have no credit card reading device of their own but have to use the facilities of other shops.
Should tourists have doubts about buying jewellery, they should obtain information from the Tourist Police or the TAT on 1155 or 694-1460.
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