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Every Kiss Begins With... Signet's Kay Jewelers Accused Of Selling Fake Diamonds

Kay Jewelers Accused Of Selling Fake Diamonds NYSE:SIG

Shares of Signet Jewelers Ltd. SIG 3.43% plunged following an investigative report that Kay Jewelers has been accused of swapping diamonds with fakes.

Parent company of Kay Jewelers and Zales, Signet might have a PR nightmare on their hands, with boycotts of Kay Jewelers gaining traction on social media.

Sophie Long of Houston, Texas, went to get her wedding band and engagement ring resized and heard the news that the stones were fake. Long’s husband shelled out $6,500 for the ring from Kay Jewelers at Houston Galleria in 2014.

This isn't the first time Kay Jewelers has been accused of swapping diamonds in 2016. Shares of Signet Jewelers fell as much as 11 percent in May after a report from CBS News accused Kay of selling cheap imitations.

Update: A Signet spokesperson told Benzinga, "[W]e question the timing of their inquiry to us when they initially reached out to us over the summer and the customer service issues have previously been satisfactorily resolved. In addition, the airing of the KPRC segment and subsequent financial media inquiries less than one week before our Q3 announcement are also concerning."

Back in June, Grants reported that Signet is generating much of its growth from internal lending and deceptive accounting.

Signet's stock was down about 3 percent at $89.63 after trading around the $92 level most of the day. Signet is scheduled to report its Q3 earnings on November 22.

Below is a statement Signet provided KPRC earlier this week:

"Delivering an exceptional customer experience is our number one priority and we regret any instance where a customer is less than completely satisfied. To help ensure that we deliver that exceptional experience, we maintain rigorous product and service quality procedures that are consistently monitored and refreshed. Greater than 99% of our service and repair transactions are completed without inquiry to our customer service centers each year. Nevertheless, we take every customer concern seriously and work hard to ensure that when issues do arise, we do everything we can to make things right. That is what we have sought to do with these customers. We are humbled by the trust our customers have placed in us for more than one hundred years and work hard every day to continue to be worthy of that trust."

© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.