The RealReal might not be so real after all, or at least not according to a new $5 million-plus lawsuit filed against it earlier this month. According to the complaint, which filed by Gaby Basmadjian in a federal court in Northern California, the San Francisco-based luxury consignment website has “systematically inflated the total weights of small uncertificated gemstones knowing that the average consumer would have no way to know that the weights were inflated.”
Novi, Michigan-based Basmadjian alleges that on August 30, 2017, she purchased a ring from TheRealReal.com for $982.62. She asserts that “the ring was represented [as containing] 2.10 carats of diamonds. At the time of the purchase, [Basmadjian] had no way to know whether the diamond weight listed on the description was accurate and was entitled to assume that the label was accurate.”
Basmadjian further states, “After receiving the ring for which the purchase was not returnable, she had the ring inspected to measure the total weight of the diamonds. Through detailed measurements performed by a gemologist, the ring was found to contain approximately 1.2 carats of diamonds. This is a discrepancy of approximately 0.9 carats,” or an “overstatement of 75 percent.”
This difference in carats, per Basmadjian, is particularly problematic for two reasons. One reason being that The RealReal “held [itself] out as an expert in the field of gemology.” Due to its authentication process – which The RealReal advertises as including “a team of authentication experts, horologists, and gemologists” – the site “guarantees that every item sold on their website and in stores is ‘100% the real thing.’” Secondly, the discrepancy runs afoul of federal law, as “the Federal Trade Commission requires that [advertised] diamond weights be accurate to the last decimal place.”
Basmadjian asserts that according to the Federal Trade Commission’s standard, “the allowable range of weights [for the 1.2 carat ring she purchased] based upon the description was 2.0955 to 2.1055 carats.”
By “intentionally overstating the weight of the gemstones in [its] jewelry,” Basmadjian claims that The RealReal has “charged [her and the other potential plaintiffs] a higher price than they should have been charged.”
As for who those other potential plaintiffs are, in addition to seeking monetary damages of upwards of $5 million in connection with The RealReal’s alleged fraud, negligent misrepresentation, and violations of various California state laws, Basmadjian has asked the court to approve her proposed class action lawsuit in order to enable others to join her suit.
The class of individuals eligible to join the case, should the court approve the class action, include, “All persons who, in the United States after December 1, 2013, purchased from [The RealReal]: (1) one or more pieces of jewelry where 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).”
A spokesman for The RealReal told TFL, “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.”
* The case is Gaby Basmadjian, individually and others similarly situated, v. The RealReal, Inc., 3:17-cv-06910 (N.D.Cal).