By Brecken Branstrator
San Francisco--A lawsuit has been filed against luxury consignment website The RealReal for allegedly inflating the stone weight of the jewelry listed on its website.

Novi, Michigan-based Gaby Basmadjian initially filed the complaint in U.S. District Court in the Northern District of California on Dec. 4.

In it, she states that she bought a ring from on Aug. 30 for $982.62, based in part on the ring’s 2.10 carats of diamonds.

20171219 TRR RingA picture and description of the ring purchased by Gaby Basmadjian on
After she received the ring, Basmadjian had it inspected by a gemologist to measure the weight of the diamonds, who found that it actually contained 1.2 carats of diamonds, which meant a discrepancy of 0.9 carats.

As the lawsuit claims, Federal Trade Commission rules state that diamond weights have to be accurate within 1/200th of a carat.

In addition, nowhere on the product description did it indicate the weight was approximated, the lawsuit states.

The RealReal has a consignment process that allows individuals have the items they want to sell shipped, dropped off or picked up by RealReal. After the company receives the piece, its team of experts then authenticates, prices and sells the item on the website.

Through its authentication process, The RealReal guarantees everything being sold is “100 percent the real thing.”

But Basmadjian believes, according to the lawsuit, that The Real Real “intentionally overstated the weight of the diamonds.”

The suit also states that The RealReal’s products vary by “far more than that allowed” under FTC guidelines, and adds that consumers aren’t advised that weights are approximate nor are they advised that the weight of stones could vary within a certain range.

In addition to seeking damages for The RealReal’s alleged fraud, negligent misrepresentation and violations of a number of California state laws, the suit also is asking the court to approve a proposed class-action lawsuit.

It would represent everyone who purchased one or more pieces of jewelry from The RealReal after Dec. 1, 2013 in which “the weight of gemstones indicated on the product label exceeded the actual weight of the gemstones in the jewelry by more than 1/100 of a carat (1 point, 2mg).”

In a statement issued to National Jeweler, a company spokesperson said their mounted diamond and gemstone inspections are performed consistent with GIA standards, and, in accordance with those industry standards, they don’t remove the gemstones from their mounting where doing so would damage or destroy the original setting and so the product itself.

She added, “The RealReal is committed to the highest standards in everything we do.  All gemstones sold by consignors on our website are evaluated by our team of skilled gemologists consistent with industry standards. The lawsuit is without merit and The RealReal will aggressively defend itself against these baseless claims.  We have no further comment on the lawsuit.”

Earlier this year, the company secured an additional $50 million in funding from Great Hill Partners, bringing its total funding to $173 million, and opened its first brick-and-mortar location in November.

CEO Julie Wainwright also told TechCrunch the retailer was on track to sell $500 million in merchandise this year.

Editor’s note: This story was updated on Dec. 20, 2017, to add a statement from the company. 

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