The RealReal’s Diamond-Fraud Lawsuit Settled Quietly

The e-retailer, The RealReal, that bases its reputation on avoiding the pricey fakes that flood the global luxury market has quietly, and without an admission of intentional wrongdoing, settled a lawsuit that had charged it with fraud. In a case that grabbed headlines at the time, the U.S.’s largest online platform for second-hand luxury transactions, The RealReal, was sued last December for allegedly defrauding jewelry buyers. According to a lawsuit filed in Northern California Federal Court by plaintiff and purchaser Gaby Basmadjian, the 18k gold ring she bought on The RealReal, described as featuring 2.1 carats of diamonds, actually contained approximately 1.2 carats of diamonds. The approximate 0.9 carats discrepancy was in violation of Federal Trade Commission regulations, according to her lawsuit. The December suit, although it was structured as a class action, did not identify other plaintiffs or incidents. RealReal countered that Basmadjian failed to prove an ascertainable loss since she didn’t show she paid more for the ring (purchased at 982.62) than its actual value. The RealReal also noted that “all product descriptions include the disclosures: ‘All gemstone weights and measurements are approximate.’” In June 2018, the Northern California court partly granted and partly denied The RealReal’s motion to dismiss the class-action suit by noting that the plaintiff receiving less than what she paid for is already proof of a sufficient pleading on ascertainable loss (since jewelry on The RealReal is priced based on gemstone weights). From the company’s perspective on this case, “The lawsuit filed by Gaby Basmadjian against The RealReal has been resolved. The RealReal did not engage in any intentional misconduct or wrongdoing. The Second Amended Complaint filed against The RealReal has been withdrawn.” said Christine Heerwagen, PR spokesperson from The RealReal. The case finally settled in August with a resolution accepted by plaintiff Basmadjian, according to her attorney.

Sectors

Insights

Company

The RealReal’s Diamond-Fraud Lawsuit Settled Quietly