You may have already heard that if you bought a diamond or diamond jewelry between 1994 and 2006, you might be able to get a share of a class action settlement. Is it worth your time to submit a claim? Based on the results of past class action suits, it’s a bit of a gamble.
My husband, who bought my engagement ring in 1997, is part of the class potentially eligible to receive money back. According to the lawsuit, he was overcharged because the De Beers diamond company was fixing prices. (Because De Beers is on the mining side of the supply chain, you may be eligible for the rebate even if you bought a diamond from a retailer — who might have been one of the company’s buyers — or from another mining company.)
The news report I first read about the settlement suggested that the rebate we receive on the $999 ring could vary greatly in size. In fact, our share of the settlement could be anywhere from $1 to $275. The amount depends on how many people make a claim, among other factors. To make a claim, we had to dig up a proof of purchase (we no longer had a receipt, but the diamond warranty card has the required information on it), search for the claims website (our local newspaper misprinted the URL), and fill out a web form. That’s not much work for $275, but it’s a waste of time if everyone follows through and we only get $1 back.
Class action lawsuits are designed to bring justice for a lot of people who have lost small amounts from the illegal practices of a single defendant. These suits save money for those who might sue if the legal costs were lower than the amount they’d receive back. (In the case of the diamond settlement, hiring a lawyer on your own would probably cost you far more than the actual diamond cost.) However, lawyers’ administrative costs of handling a large class add to the overall legal costs for defendants, and the amount received by individual class members shrinks accordingly.
My family’s prior experience with class action suits is not unusual. A few years ago, we received a notice that a computer we owned qualified us for a class action settlement. We had been having problems with the computer freezing frequently, but we just thought it was a poorly made product and vowed never to buy that brand again. It turned out it was a bad part, and people who had actually paid to have their computers repaired would be reimbursed for the repairs. Because we didn’t bother to call about the problem, our share of the settlement was $50 in credit toward the purchase of another product made by the same company. The products for which we could use the credit were all above $50, and none were anything we wanted. We might have been legally wronged, but $50 in credit for something we didn’t want was a lousy compensation. We signed away our rights to that disappointing settlement.
The diamond settlement seems a bit more promising. The actual act of making a claim was fairly easy — it can be done online and, unless your diamond cost $10,000 or more, you don’t have to send in your proof of purchase unless requested. I confess that I didn’t read all the details at the claims website, but I did learn from the FAQ that the settlement terms have not yet received approval and that if my share of the settlement is less than $10, I won’t receive anything at all. (The administrative costs hurt the consumer again!)
My husband and I decided that this particular class action suit is worth the gamble. We’re betting on the odds that most people who bought a diamond during that twelve-year period have lost their proofs of purchase and, even if they haven’t, will decide that submitting a claim isn’t worth their time or will miss the May 19 deadline. As with any non-specific amount of money promised for the future, we aren’t counting on it, but if we receive a check for $275, we’ll be pleasantly surprised. Really, if we receive a check for $10, we’ll be pleasantly surprised. If we receive nothing back, all we wasted was a half hour of time.
Image courtesy of Rubyran