That Kay Diamond may come with a Debt Collector

(CBS NEWS) Diamonds may be a girl's best friend, but in some cases those jewels may end up more like a frenemy.

Dozens of consumers have complained to the Consumer Finance Protection Bureau about harassing phone calls from Kay Jewelers demanding payment, while others have complained about incorrect credit report information and fraudulent charges related to Kay purchases. Signet Jewelers (SIG), the parent company of Kay and rival chain Zales, may be courting regulatory scrutiny over its reliance on in-store financing for jewelry sales, according to Buzzfeed, which cited a report in Grant's Interest Rate Observer.

The focus on Signet's in-store financing comes amid damaging accusations that some Kay workers swapped out the diamonds in their engagement rings with cheap imitations. Signet's shares have lost 15 percent of their value since the complaints came to light through Thursday, with the stock taking another dive on Friday. Signet is vulnerable to what investor Marc Cohodes told Grant's is "a Lumber Liquidator's scenario," referring to that company's sharp stock selloff after CBS' "60 Minutes" reported the chain was selling laminate flooring with toxic levels of formaldehyde.

"Any news show can send in hidden cameras and then the stock gets cut in half," Cohodes said, according to Buzzfeed. "Who is to say that ABC or "60 Minutes" doesn't walk into one of these stores with a hidden camera and gets the diamond appraised and the clerk hands it back not as the A-grade stone that the customer actually bought but as Moissanite or as a D-grade diamond instead?"

Grant's Interest Rate Observer didn't respond to a request for information. In a statement emailed to CBS MoneyWatch, Signet said it "has in place vigorous product quality procedures that are consistently monitored." It said that most complaints relate to repairs taking longer than expected or shipping delays.

Signet added, "We strongly object to recent allegations on social media, republished and grossly amplified, that our team members systematically mishandle customers' jewelry repairs or engage in 'diamond swapping.'" It added, "Signet is an industry leader and is an accredited member of the Better Business Bureau with an A+ rating."

Given the CFPB has been scrutinizing consumer loans from non-traditional lenders, such as payday loans, Signet could attract regulatory attention for its financing techniques. More than 3,000 personal bankruptcy filings listed Signet or one of its brands as a creditor in the second quarter, Buzzfeed reported.

Complaints at the CFPB include allegations of aggressive phone tactics, such as one customer who said he had been called 20 times in one day alone from a debt collector for Kay. Other complaints claim similar tactics, with debt collectors calling multiple times per day from different numbers, including private numbers. Others claim debt collectors called relatives or their employers.

The company has a lot at stake in keeping its in-house financing operations running smoothly. In its annual report, Signet said customer financing is "an important element" in its bridal business, and said its customer finance program delivered $252.5 million in income in its last fiscal year. More than 60 percent of sales are tied to its financing program. The average credit score for its in-store financing customers is 662, considered "fair," but not sterling.

Diamonds may be forever, but some customers may be regretting the longevity of their financing deals.