Touchstone

Hallmarking crimes In this feature touchstone award collaboration metal industry Tip of the iceberg Marion Wilson tells us about the Touchstone Award 2015 winner and how a crackdown on non-compliance in hallmarking through collaboration can reveal other violations T he jewellery market in the UK has changed significantly over the past decade, but the legislation that regulates it is 700 years old. Hallmarking the process of marking articles of gold, silver or platinum to certify their standard of purity is a long-established example of consumer protection. Enforcement of hallmarking is crucial to protecting both the trade andits customers at a time when there is significant scope forcounterfeiters. Yet, as this years Touchstone winning entry shows, itcan also uncover wider crimes. Awarded to the best enforcement or educational initiative related to hallmarking, the Touchstone Award 2015 went to Manchester, for a survey-led initiative headed by Magdalena Preston. After targeted inspection of jewellers in the City of Manchester, the survey partnered with the police to do joint enforcement visits, examining several areas of potential non-compliance. More than a third of items examined were not hallmarked, and more than a third of premises did not have stamped weighing equipment. The joint inspection also revealed other failings; almost half of the premises inspected were in breach of the Companies Act 2006 for not displaying ownership details, while theft, fraud and the handling of second-hand goods were also crimes investigated in theinitiative. Significance of hallmarking Over the past decade, the jewellery market in the UK has changed dramatically, driven by the rising price of gold and the increasing consumer appetite for branded goods. The gold price had been steady for years at around 250 per ounce until the beginning of TAP TO NAVIGATE PAGES 1 2 3 4 5 6 TOUCHSTONE AWARD The British Hallmarking Council (BHC) Authorities are encouraged to enter Christopher Jewitt, chairman of the regards the Touchstone Award as an BHC, said: We are delighted to see the the Touchstone Award for 2016. The important tool to promote education and Touchstone Award go from strength to application process is very simple, the enforcement of hallmarking. This years strength. It is crucial to the health of our requiring a brief questionnaire to be competition was launched at Goldsmiths buoyant jewellery and precious metal completed, outlining the initiative, its Hall in November. Manchester, the winners industry, to provide a level playing field target audience, activity undertaken of the 2015 award, were treated to a tour for consumers and the trade. Some and the outcome. An independent BHC of the Assay Office, lunch in the glittering recent hallmarking investigations have committee will judge the entries, assessing surroundings of Goldsmiths Hall in the also revealed a much wider underlying each one against set criteria to determine company of members of the BHC and network of serious crime. a worthy winner. The closing date for the Worshipful Company of Goldsmiths applications is Friday 29 April. For more The British Hallmarking Council is and further training from deputy warden committed to working with CTSI and other information, contact Alison Byne or call Robert Organ. authorities to enforce our legislation. 020 7606 8971. Credits Marion Wilson is the director of To share this page, in the toolbar click on theAnchorCert Academy at the AssayOfficeBirmingham. Images: adike / Shutterstock the recession in 2008, which turned private and public investors from stocks and shares to the comparative safety of gold. The inevitable consequence was that gold prices soared, hitting 1,000 per ounce in 2011, rendering 9ct gold unaffordable to its previous target market. Asaresult, 9ct gold hallmarking volumes in the UK dropped from nearly 24million in 2001 to just two million in 2015. This gap in the market was replaced by silver, while branded jewellery which was becoming established in the sector received a huge boost. Brands such as Pandora, Links of London, Tiffany and manyothers add huge value to the basic, intrinsic worth of the metal. Suddenly, the scope for counterfeiters became significant. The value ofgold items remains exceptionally high and the age-old opportunity tocheat by minor or major under-carating or all-out counterfeiting isareal concern. The British Hallmarking Council (BHC) is well aware of this and the Touchstone Award jointly funded by the four UK Assay Offices, Birmingham, Edinburgh, London and Sheffield was launched in 2012to encourage action, and to reward the best enforcement or educational initiative relating to hallmarking. Support for the award has been strong and the winning entries have demonstrated the need to maintain focus on hallmarking enforcement, which protects both the trade and the consumer. 2015 Touchstone Award winner The investigation of jewellers in Manchester in 2013-14 was focused, thorough and featured an impressive level of collaboration, which ensured the project brought maximum results and could follow through with resources. The initiative, led by Preston, identified a significant level of non-compliance on weights and measures, legal requirements and hallmarking. An increase in complaints regarding jewellers, against a background of non-conformity, prompted the investigative survey. The target audience of 46 premises was derived from inspecting all businesses listed on the councils database as dealing in precious metals. The list included specialising in high-purity Asian jewellery of which there is a significant concentration in the M14 postcode boundary as well as pawnbrokers, cash-for-gold traders, high street shops and independent boutiques. The wide spectrum of businesses tobe inspected provided a representative and fair reflection of the level of compliance. Having identified the target audience, Preston planned carefully and sought collaboration, to ensure the project was comprehensive, beneficial and had a worthwhile outcome. The inspection list was produced at the beginning of the financial year, in April 2014, and it wasagreed that one inspector of weights and measures would visit all the premises in the survey to ensure uniformity and consistency. Collaboration Contacts at Greater Manchester Police were established, including with beat managers, police constables, detective constables, sergeants and inspectors. The relevant officers for each area were informed of the inspection activity and invited to attend. Officers covering three geographical areas responded and expressed an interest in conducting joint enforcement visits. One was in relation to the execution of a warrant for jewellery theft; another was for routine neighbourhood policing and maintaining a profile; and the third was for investigating the acquisition, handling and recording of transactions of second-hand goods. Promoting the initiative provided the opportunity for productive collaboration, and contact was also established at Sheffield, the nearest Assay Office to Manchester. A questionnaire was devised, for completion during each inspection, and a file was compiled that contained standard advice letters, downloadable Dealer Notices, publications and contact details. To ensure maximum use, the survey included several areas of inspection: price marking, to ensure compliance with the Consumer Protection from Unfair Trading Regulations; weights and measures and the use of accurate, approved, stamped equipment; hallmarking; membership of trade associations; the sale of second-hand goods, for compliance with the Greater Manchester Act 1981; and the display of correct ownership details, as per the Companies Act 2006. Results and impact There were non-compliances in every category, the highest being 47.5per cent not displaying ownership details as required by the Companies Act 2006, and 40 per cent failing to display either the buying, selling or unit price. For legislation relating specifically to hallmarking and precious metals, 37.5 per cent had no hallmarked items, 32 per cent did not have appropriate, stamped weighing equipment, and 27.5 per cent were not displaying a current Dealer Notice. The comprehensive survey was followed up thoroughly. Preston took efficient action, from downloading Dealer Notices from the BHC website and providing free advice and pre-printed Companies Act notices, toremoving one non-compliant scale from use. Assay Offices and jewellers were put in touch, and revisits were conducted to ensure compliance. Operations involving Greater Manchester Police included a warrant executed at one premises, joint enforcement conducted in the M14 postcode area which helped to form a relationship between the traders and enforcement authorities and an ongoing investigation into a number of other premises. In addition, during the inspection a trader made two allegations of insurance fraud against his customers. The fraud appears to be widespread and, in some cases, could amount to six-figure sums. Thematters have now been reported to Greater Manchester Police andAction Fraud for further investigation. The level of collaboration in the face of resource challenges, and thefocused, persistent approach, meant that the project was able to follow through into outcomes. Continued activity in this area has demonstrated a significant increase in compliance for the business sector, and has improved communication channels between regulators and businesses, paving the way for continued improvement in compliance levels. Runner-up and last years winner Entries for the 2015 Touchstone Award included a variety of investigations. Derby was shortlisted for a proactive exercise targeting jewellery shops. Before the project started, training was undertaken at the Assay Office in Birmingham to ensure officers were fully aware of all potential offences. Of the 50 shops visited, 70 per cent were compliant, while offences in the remainder ranged from out-of-date or non-existent Dealer Notices, to hundreds of purportedly 22ct gold items not being hallmarked. Eight non-compliant jewellers were identified, each with several hundred un-hallmarked high-value items. Through tenacious follow-up and revisits, all premises became compliant, demonstrating the importance and effectiveness of persistent and appropriate enforcement. The Touchstone winner in 2014 was Southwark. Their investigation focused on a Mr Haji, who purportedly ran a phone and computer repair business. However, he also traded lucratively in counterfeit Links of London and Pandora jewellery, some of which was not sterling silver, and some of which bore counterfeit hallmarks. More than 1,000 items were seized from his premises in September 2011 and the case finally concluded in October 2015, when Mr Haji was ordered to pay back more than 50,000 under the Proceeds of Crime Act. This was in addition to the 12-month community order, with 120 hours of unpaid work, to which he had already been sentenced in 2014 for trademark and hallmark offences. In the concern over life-threatening issues such as counterfeit vodka and cigarettes, unsafe toys and brutal loan sharks, it is easy to push hallmarking down the list of priorities for enforcement especially when resources are so stretched. Yet entries to the Touchstone Award over the past two years indicate how important this legislation is. Such investigations are often not easy. Manchester acknowledges the cost and resource required to do a survey and Derby notes the reluctance of some of those visited to cooperate. However, the outcomes illustrate how important they can be, with numerous examples of how hallmarking offences may be the tip of an iceberg of more serious crime. Magdalena Preston receives the Touchstone Award from Christopher Jewitt, chairman of the BHC, at Goldsmiths Hall. She is joined by Janet Shaw, citywide support team lead, Louise Carter, Marsha Bell and Wendy Levy, of Trading Standards Manchester, and Anna Whitlow, of Cheshire West and Chester Trading Standards