On November 15th, 2010, Diamond Exchange Ltd., an Australian based online retailer of diamonds was officially placed under liquidation proceedings by the Melbourne office of the accounting firm of Worrells. In what is considered a nightmare by consumers and an end game that may have been avoided with proper investigation, Diamond Exchange now faces a line of over 300 creditors who have little to no chance of seeing refunds or payment for services provided. All told, Diamond Exchange is said to owe $4.5 million dollars to creditors, including $1 million to customers who paid for but never received diamonds they purchased on Diamond Exchange's website. Also impacted will be the consumers who purchased diamonds from DE’s retail locations including offices in Toronto and New York City.
For months, complaints rolled into Australian media outlets and trade organizations such as the JAA regarding problems with Diamond Exchange. Consumers faced massive delays on products ordered, though the company assured customers that they would receive their diamonds in 10-15 business days. In many cases product was shipped months later; for those who spent all of their hard earned savings on engagement rings, dreams of proposals became nightmares with no resolution. Stories have been told across internet forums by people who mistakenly thought that the diamonds and rings they ordered were actually stocked by Diamond Exchange.
From one consumer: "they wanted payment up front also which seemed OK since they (had) multiple physical offices all over Australia and had been around for quite a while and up to July had a decent reputation. They said they could get the one I wanted and so I 'purchased' the diamond. And paid with all my savings I have been storing up for this purpose over the past 5 years since I met my girlfriend. Weeks have passed and I have (been) following it up with excuses of 'customs have it' and 'suppliers having problems'. After 2 months of delays and broken promises I requested a refund. This request was not answered by anyone and repeated calls etc still have resulted in nothing. I have not been able to propose nor can I afford another ring. I cannot even tell my (future?) fiance why as I don't have the money back yet to start the process again."
In truth, the products sold by Diamond Exchange online were not held in physical inventory but delivered through drop shipping from several suppliers worldwide. Until early this month, Diamond Exchange’s website was still up and running, accepting payment for goods that will never be delivered.
In 2005, a Diamond Exchange financial report stated "As a result of losses incurred by the company [Diamond Exchange Ltd ] and subject to continuing shareholder support being provided, there is inherent uncertainty whether it will be able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report."
Diamond Exchange Liquidation
ReplyDeleteOn November 15th, 2010, Diamond Exchange Ltd., an Australian based online retailer of diamonds was officially placed under liquidation proceedings by the Melbourne office of the accounting firm of Worrells. In what is considered a nightmare by consumers and an end game that may have been avoided with proper investigation, Diamond Exchange now faces a line of over 300 creditors who have little to no chance of seeing refunds or payment for services provided. All told, Diamond Exchange is said to owe $4.5 million dollars to creditors, including $1 million to customers who paid for but never received diamonds they purchased on Diamond Exchange's website. Also impacted will be the consumers who purchased diamonds from DE’s retail locations including offices in Toronto and New York City.
For months, complaints rolled into Australian media outlets and trade organizations such as the JAA regarding problems with Diamond Exchange. Consumers faced massive delays on products ordered, though the company assured customers that they would receive their diamonds in 10-15 business days. In many cases product was shipped months later; for those who spent all of their hard earned savings on engagement rings, dreams of proposals became nightmares with no resolution. Stories have been told across internet forums by people who mistakenly thought that the diamonds and rings they ordered were actually stocked by Diamond Exchange.
From one consumer: "they wanted payment up front also which seemed OK since they (had) multiple physical offices all over Australia and had been around for quite a while and up to July had a decent reputation. They said they could get the one I wanted and so I 'purchased' the diamond. And paid with all my savings I have been storing up for this purpose over the past 5 years since I met my girlfriend. Weeks have passed and I have (been) following it up with excuses of 'customs have it' and 'suppliers having problems'. After 2 months of delays and broken promises I requested a refund. This request was not answered by anyone and repeated calls etc still have resulted in nothing. I have not been able to propose nor can I afford another ring. I cannot even tell my (future?) fiance why as I don't have the money back yet to start the process again."
In truth, the products sold by Diamond Exchange online were not held in physical inventory but delivered through drop shipping from several suppliers worldwide. Until early this month, Diamond Exchange’s website was still up and running, accepting payment for goods that will never be delivered.
In 2005, a Diamond Exchange financial report stated "As a result of losses incurred by the company [Diamond Exchange Ltd ] and subject to continuing shareholder support being provided, there is inherent uncertainty whether it will be able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report."
Source-Sherman Pike Jewelers Ethics Association