Gem Scam FAQ

(Photo: 2Bangkok.com)

(Photo: Anthony Mak)

If you want a refund

As of 2008-2009: If you can to Bangkok in person with the gems and relevant documents and receipts, getting a refund should not be complicated.  Generally, there are no problems in returning to the store, but they may not agree to refund the entire sum you paid.  There are numerous reports from other victims who said they obtained a 100% refund with the assistance of the Department of Internal Trade (DIT), although these have become less frequent.  The Tourist Police are generally unreliable and should be avoided.  If you're going with a friend, you can always try going back to the store directly. (This information is from the "Thai Gem Scam Group")

Reports of violence against tourists asking for a refund have become rare. What has happened in recent years is that the scam has, in effect, been legalized by having tourists sign a document that, among other things, states that the buyer will accept an 80% refund if they wish to return the gems. This means police will not allow you to file a report since technically you willingly paid for the gems and it is your fault you overpaid for them. The path for grievances is to return to the store for your agreed to 80% refund.

In most cases the refund will be made albeit grudgingly, but there are few older female managers that sometimes give tourists a hard time over the refund and you may have to bargain hard to get your 80%.

Guerrilla tactics against the gem scam

From the Thai Gem Scam Group:
* A scammed German tourist went back to the location of her now-closed store and picked up all the mail that had collected in front of their door.... We are going through it to find anything of interest, including phone calls to TP (tourist police) officers' mobile numbers.... she managed to smear the paint on the doors to write out “don’t buy” and then keyed “scam” for good measure.
* A couple of members have been attempting to go through the scam again, this time with hidden cameras or other attempts to take photos--but this is taking your life into your own hands. The police will not protect you.

Gem Scam FAQ

The gem shop had the word "Royal" in its name. Doesn't that mean it is legitimate?
No.

But the man had an official ID...
Thai IDs mean nothing. They are readily available for a small fee to anyone. Even if the gem factory looks official and is close to reputable government offices, it doesn't mean they won't cheat you.

Are the jewels fake?
No, almost always the jewels are correctly identified. The scam is that the uninformed customer pays a greatly inflated price.

How about the Tourism Authority of Thailand?
You will be told there is little that can be done. The attitude of "rich, greedy tourists deserve to be cheated" is common throughout Southeast Asia.
Many cheated tourists are puzzled by the vague warnings the TAT posts--like "be careful of buying jewelry from people that approach you on the street." Considering how many people know this and are still fooled by the professional way the scam is conducted, it seems that the TAT is not being very effective in dealing with this problem.

How long has the scam been going on?
We have found references to gem scams in Bangkok all the way back to the 1950s.

Why don't the police crack down?
Despite the pledges made at every international tourism convention to stop the crime, the way the laws are, there is really very little the authorities can do. The victims and gems have to be in the country for a complaint to be filed, an appraiser has to be hired, and fines for the perpetrators are so minuscule, it is not worth filling out all the paperwork. Cracking down is just not a worthwhile use of their time. (The Bangkok Post has a good article explaining this.)
Also, everyone from the TAT to the government interpreters who help tourist file police reports will openly admit (often in front of smirking police officers) that the police are part of the scam.
TAT officials have also told 2Bangkok.com that the stores are protected by local police. In particular, the Vandee scam shop, which operated just a few blocks from TAT headquarters, was considered particularly humiliating to TAT officials who were unable to close it for many months.
The Nation also reported (December 24, 2002) that officials admitted some shops remain open because "influential persons in uniform" protect them.

Who runs/is complicit in the gem scam?

Gold shops
We do not have a person's name, but Bang (or Hang) Thong Thong Bai/Ranghang Thong Thong Bai gold shop is one of linchpins of the gem scam. It is used to cover the money trail by giving cash advances on credit cards and selling gold to tourists which is exchanged for overpriced jewels. What this means is that all the money from many gem scam shops is flowing back into this gold shop, but why isn't this shop ever mentioned in any "official" discussions of the scam? With perseverance, scammed tourists can demand police file reports on the gem shops and eventually the gem shops will have to change their names, but police outright refuse to mention gold shop in their reports. (UPDATE: Gold stores were finally mentioned in a Tourist Police brochure circa January, 2004)

Banks in Banglamphu
Branches of banks that operate in the Banglamphu area (where most of the scam shops are located) also cooperate in the scam--particularly Thai Farmers Bank and Thai Military Bank. Thai Military Bank has been know to give credit card machines to the scam stores so they can allow scam customers to pay by Mastercard, however the charge made is a cash advance directly from Thai Military Bank (Banglaphu branch). Tourists who think their purchases are protected because they paid by credit card are surprised to find the transaction booked as a cash advance directly from Thai Military Bank.

Local Visa and Mastercard
Neither Visa nor the local Mastercard company seem concerned that known gem scam shops have credit card machines that say "Thai Military Bank" and are using them directly on their premises.

Why do Thai people put up with the scam?
Most Thais have never heard of the gem scam. Here is an article in Thai explaining it.

For our Japanese readers (thank you to TORIchang):

Do I stand any chance of getting any compensation through legal action?
Probably not. Here is a sample legal opinion:
Dear Mr. XXXX,
Reference is made to your e-mail dated XXXX with thanks.
We are of the opinion that you should report to the tourist police so that the police officer will assist you somehow, for instance, negotiating, proceeding the criminal case. They also have a good command in English.
If you decide to appoint a law firm in Bangkok, we are afraid that it will cost you quite a lot of money comparing to the value of the gem.

Why would the owner, who has already shut down his firm thus avoiding legal liability, even bother to show up, let alone comply with any ruling?
We have not heard of anyone getting the shop owners to court. The scams are not conducted by individual owners, but by an organized cartel that is protected at the highest levels. What you will find is that at every turn people will try to discourage you--your paperwork will not be complete so everything is delayed, the police will give you a friendly warning that the gem owners will send people to beat you up, etc. If you had the time and money, it would be nice to try something like this just to bring attention to this problem. Thais are sometimes shamed by bad publicity.

Has anyone at 2Bangkok been a victim of the gem scam?
No. We have just been maintaining this page since 1999 as a public service.

Is 2Bangkok part of the "The Thai Gem Scam Group"?
No. That is a group formed by cheated tourists. You can contact them at [email protected]

Can 2Bangkok.com recommend a good gem shop?
There are reputable shops in town, but we have found that even those approved by the Thai Gem and Jewelry Traders Association will scam. The main indicator of a good gem shop is its location. The shops in and around the downtown Ratanakosin area (where the Grand Palace and other historical monuments are) should be avoided. Shops in the Silom/Sathorn gem district are known to be honest. However around the Subway Skytrain junction at the Silom Station friendly touts work under the protection of the nearby corrupt Lumpini Police Box to steer tourists to scam shops downtown.

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