Universal Law of Finance #37: Any company that makes a ton of money will eventually have to give some of that money back in a class action lawsuit settlement, usually because it did something painfully illegal.
Normally I don’t get too hyped up over class action settlements because an individual included in the settlement class typically only receives a few bucks or a worthless gesture of apology. This one is different. De Beers, the company which essentially has a monopoly on the world’s supply of diamonds, is settling a massive lawsuit brought against it under allegations of monumental price fixing. Whether De Beers is guilty or not will never be decided in court because it’s taking the usual big business way out of gigantic class action lawsuits and throwing out a small morsel of the $6 billion it brings in each year in order to make the whole thing go away. Fortunately, what may be a pittance to De Beers could translate into a sizable sum for you and me.
Under the terms of the settlement, consumers who have purchased a diamond in any form (engagement rings, other jewelry, or even mixed with other gemstones) between January 1994 and March 2006 could be eligible for a tidy refund—anywhere from six to 60% of the original purchase price. Depending on how much you spent on diamonds during the period in question, you’ll be eligible for a refund that you can estimate from the following table.
A lot of people married in the last decade could cash in nicely on their engagement ring purchases. For example, an engagement ring that set you back $5,000 would mean you’d be entitled to a settlement of about $1,600. Those shelling out twice that or more—$10,000 and up—will find themselves in a higher percentage bracket and entitled to $4,500 for every $10,000 they spend on their rings. Other types of diamond jewelry are also available, so good luck trying to remember all of the diamond jewelry you’ve bought since 1994.
Consumers have a few things going against them in this settlement:
- Lots of people could mean less money for you. The total amount De Beers will pay is capped at some obscene but finite nine-digit figure, so if enough claims are made, you might get less than that percentage listed in the table above. Hmm, maybe I should keep this to myself…
- You need receipts. While you probably won’t be asked to produce them, the settlement administrators reserve the right to request that you provide receipts for your diamond purchases, and certain large purchases will require a receipt before you get your settlement. Credit card statements should work too, so start digging for your documents before you file a claim. Don’t be an idiot and add an extra zero to your diamond purchases because you could find yourself getting nothing later.
- Don’t bother if you spent only a bit. If your total diamond purchases during that period were under $165 for mixed-gem jewelry or $95 for diamond-only jewelry, you can stop right now because your settlement chunk would be $10 or less. Such small settlement claims will not be paid due to “administrative costs.”
- Anything could happen between now and later. It’s likely that the settlement will go through as it’s currently written, but there’s always the chance that something could happen—anything from minor rewrites of clauses to total scrapping of the settlement due to objections or other legal maneuvers.
If you have your receipts and are ready to file a settlement, you can do it online in just five minutes right here:
I filed mine today for two pieces of diamond jewelry: my wife’s engagement ring (bought in 2004) and a diamond pendant (Christmas 2006). When I told her about it, her reaction was priceless: “That’s a diamond in that pendant?” (I wish I were making that up, but I’m not.) Yeah, she’s getting toy jewelry from those 25-cent dispensers in the supermarket from now on.