Over-graded diamonds hurt consumers
To navigate through this website please click the MENU button in the top right corner of this page.
Hundreds Of Thousands Of Diamond Consumers Have Been And Are Being Cheated By Dishonest Retailers Selling Over-Graded Diamonds
The average consumer is unable to view a diamond and to properly assess its quality and worth. As a result of this Diamond Grading Reports, or "Certificates" have come to play a huge role in shopping and purchasing decisions.
Diamond Grading Reports give an assessment of the 4C's of grading Color, Clarity, Carat Weight and Cut of a diamond. The industry standard for grading the 4C's of a diamond is an assessment by the Gemological institute of America (GIA). GIA is a not-for-profit entity that was founded in 1931. GIA established the first parameters for the 4C's and created the diamond grading scales for Color and Clarity. GIA Gem Trade Laboratory Diamond Grading Reports are recognized as the industry standard because of their high degree of reliability, consistency and integrity.
Many other gemological and diamond grading laboratories have simply gone ahead and utilized the grading scales that GIA invented and has the sole rights to. The problem is that each laboratory will grade Diamond Color and Clarity using the GIA scales and nomenclature but will apply different standards when assessing grades. Some of the other laboratories are very strict and have adhered as closely as possible to the GIA standards. These laboratories are usually with an industry accepted one color and one clarity difference from GIA standards. Some laboratories seem to consistently grade both one Color grade and one Clarity Grade higher than GIA standards. And some laboratories have consistently issued reports that seem to be four Color grades and two Clarity grades or more higher than GIA standards that are clear misrepresentations of the quality of the diamond..
The European Gemolocal Laboratory-International (EGL-I) was a for-profit franchise that was widely regarded by the diamond trade as the most inferior of all the diamond grading services. We believe that this laboratory has also done business as EGL Israel and EGL European. It is very possible that the principals are still doing business under another name or under other names.
Ethical and reputable jewelers refused to accept and sell diamonds with EGL-International Diamond Grading Reports. On the other hand unethical and unscrupulous retailers saw easier sales and larger profits if they adopted a business model centered around selling diamonds with these highly over-graded European Gemological-Laboratory International reports. These jewelers would pass off inferior quality EGL-International diamonds to consumers as equivalent or (nearly) comparable to GIA graded diamonds by using GIA Color and Clarity grading terminology that EGL-International graded diamonds do not remotely meet.
The unethical retailers who sold quantities of EGL-International graded diamonds would often market themselves as "wholesalers" or "direct importers" when, in reality, they were only selling highly over-graded diamonds that they acquired at deep discounts to comparable GIA diamonds.
Retailers who engaged in this deception were sometimes caught in their misrepresentations. Lawsuits have been filed. Below are links to some of the lawsuits that have been filed:
Lawsuit filed by M. Nathaniel Averitt against Genesis Diamonds in Tennessee
News of Lawsuit filed by James Wells against Genesis Diamonds in Tennessee
News of Lawsuit filed by Richard Vien against Genesis Diamonds in Tennessee
News of Lawsuit filed by Allan (A.J.) Zyla against Genesis Diamonds in Tennessee
Lawsuit filed by Kelly Dane against Diamond Doctor in Texas
News of Lawsuit filed by Robert Ramsey, Javier Garcia and Jennifer McMullen
against Mervis Diamond Importers in Maryland
Knowledgeable members of the diamond trade were aware of what had been going on. At a certain point in time ethical members of the diamond and jewelry industries realized that there was a need to speak out and to take action against activities by unethical dealers and retailers that would hurt the reputation of the industries.
On September 9, 2014 the world's largest B2B diamond exchange, Rapnet, announced that it would ban the listing of all EGL-International graded diamonds on its exchange. On September 17, 2014 the largest B2B community and trading network for jewelers , Polygon, banned the listing of EGL-International graded diamonds. On October 1, 2014 Rapnet banned the listing of any EGL graded diamond. On November 1, 2014 the leading trade publication of the diamond industry released a special investigative report entitled "Honest Grading" that examined the fraudulent sale of EGL-International graded diamonds by certain major diamond wholesalers and retailers. This report can be downloaded from the link below
EGL-International has been closed for business. However, there will always be unscrupulous and unethical retailers who are willing to use any means - including selling fraudulent and over-graded diamonds for their own gain.
Since 1986 European Gemological Lab-USA has been independent of the entire EGL network of franchises and any lawsuits that have been filed are unrelated to EGL USA. Statements from EGL-USA regarding these issues may be found here.
Honest Grading Video From Martin Rapaport
Overgrading has become institutionalized. Hundreds of thousands of diamonds worth billions of dollars have been sold to consumers with overgraded reports in the
past few years. - M. Rapaport
The takeaway is that overgrading reports have become a license to lie about quality. - M. Rapaport
Let us be perfectly clear on this: The GIA is the global diamond grading standard accepted by the international trade and the legal systems of the United States and other countries. - M. Rapaport
RapNet recognizes that GIA and other laboratory diamond grading is based on human evaluation and is therefore subjective. We recognize that a difference of
one color and one clarity between diamond grading reports from the same or different laboratories is
within a reasonable tolerance range. - M. Rapaport
Diamond grading reports labeled EGL International commonly use Gemological Institute of America (GIA) terminology to describe diamonds as four or more color/clarity combination grades
higher than what the GIA would give the same stones. - M. Rapaport
The overgrading of diamonds is an unfair practice that destroys consumer confidence and the legitimacy of the diamond industry. Retailers who sell overgraded diamonds using GIA terminology and non-GIA
grading standards are at great risk. When consumers try to resell their diamonds or send them to the GIA for regrading and discover significant quality differences, there will be hell to pay. The diamond trade must prioritize the protection of consumers
above profits." - M. Rapaport
Essentially, the retailer will be 100 percent solely responsible for the refund with no legal recourse to the supplier. It will get even more interesting when consumers demand triple the damages they are entitled to from retailers who have sold them misrepresented overgraded diamonds. - M. Rapaport
Overgrading is not just a legal issue, it is an ethical issue facing the diamond and retail industry. - M. Rapaport
RapNet recognizes that some EGL grading reports are more consistent with GIA grading standards than others. In our opinion, there is confusion and
inconsistency among the various EGL grading reports and we have therefore decided not to list any EGL grading reports on RapNet. - M. Rapaport
Wikipedia Listing for Martin Rapaport, Chairman of the Rapaport Group.