A 14K custom-ordered pendant was purchased from Donald Bell Goldsmith on March 6, 1998. The results of a test conducted by the Royal Canadian Mint revealed a gold content below the declared quantity and below the tolerance set out in the Precious Metals Marking Regulations . This is a misleading representation to the consumer, who is paying for a quality of gold that is not being delivered. This action also gives the company an unfair economic advantage over its competitors by reducing its costs of manufacturing finished articles. A false representation of quality or weight on a precious metal article is something that consumers cannot readily detect.
Consumers depend on the integrity and honesty of the vendor.
Consumers may only detect the misrepresentation at time of insurance appraisal or when a custody transfer occurs, at which time it is too late for remedial action with the retailer. In this case, the vendor was also the manufacturer and had full control over the gold content of the article. When consumers shop around for an article of gold, the quantity of gold affects the ultimate price of the article. If the gold quality of the article is misrepresented, then consumers cannot compare prices in a fair and equitable manner.