Bogus Diamond Certificates - Source: Jewelry Insurance Issues
Source: Jewelry Insurance Issues...How can you tell a reliable diamond certificate from just another advertising tool?
“Certified diamonds” have a remarkable draw in jewelry sales. Consumers realize they have little expertise in judging diamonds, so they rely on paperwork to prove the value of what they are buying.
Retailers are offering this proof. Zales, a major jewelry chain, started certifying large diamonds five years ago. Because customers have come to expect certificates, the store NOW supplies them even for low-cost fashion items.
However, not all diamond certificates are reliable.
A reliable diamond certificate is a detailed description of the stone prepared by a respected independent laboratory, such as the Gemological Institute of America (GIA). Its purpose is to verify the quality of the diamond. A certificate from an independent lab does not carry valuation, since this isn’t the domain of the lab.
The new trend among large retailers is to supply documents that do carry valuation.
1. For example, Costco, the membership warehouse club, offers on its web site a 1.14 carat diamond ring that retails for $6,999.99. It comes with a “Summation of Appraisal” certificate placing its value at $12,955. (View description and certificate.)
How can a buyer pass up such a bargain? The ring is worth twice its price and here’s a certificate to prove it!
2. Another item for sale through Costco is a 3.06 carat diamond ring selling for $31,699.99, with a certificate valuing it at $61,480. (View description and certificate.)
3. A 3.07 carat diamond ring from Costco selling for $21,999.99 comes with a valuation of $44,745. (View description and certificate.) These three examples are typical of the discrepancies between price and valuation.
What’s going on here? Can Costco afford to sell its jewelry at half the price of other retailers, simply because of its high volume? The answer is: No.
If you were to buy that $22,000 ring in a retail store in a small town in the Midwest, would you have to pay $44,745? Highly doubtful.
It is often argued that jewelry prices in, say, New York City are lower because there is more competition. However, in the Midwest rents and salaries are lower, so things pretty much balance out. And everyone is in competition with the Web. Jewelry is ultimately a national market, not a local one.
What’s going on here is a subtle scheme. Costco’s jewelry is, in fact, fairly priced. The valuations, however, are totally unrealistic.
Independent analyses of the stones’ qualities (as described on the Web site) show that the selling prices are quite competitive. These rings, if the quality is as described, are good deals.
The purpose of offering a certificate that places valuation at double the selling price is to lure consumers into making the purchase. The “Summation of Appraisal” comes from a lab with an official sounding name. It has a certificate number, a stone number, a photograph of the jewelry. Internet shoppers, especially, expect bargains, and this “Summation of Appraisal” acts as evidence they are getting a bargain.
The customer gets what he pays for, but here’s the danger for insurers. The document states: “This summation of appraisal is for insurance purposes.” If the insurer sees only this document and not the sales slip or an independent appraisal, the policy will be based on the inflated value rather than a realistic one.
Do not rely on diamond certificates that carry valuation, as these valuations are often inflated and the description may not be accurate. Ask to see the sales slip. Ask for a descriptive appraisal and valuation by a graduate gemologist who is a Certified Insurance Appraiser (CIA)™ and who has examined the stone.
Be attentive with jewelry from large retailers, especially when the purchase price is significantly below the certified valuation.
For large retailers, certificates and other appraisal documents are sales tools. You have no way of knowing whether a certificate supplied by a retailer represents the jewelry actually purchased. The same is true for online purchases. Ask for a descriptive appraisal on ACORD 78/79, prepared by a graduate gemologist who is a Certified Insurance Appraiser (CIA)™.
Even certificates from respected authorities such as GIA and AGS leave out information crucial to valuation, such as mounting data. For quality jewelry, always ask for a descriptive appraisal, preferably on ACORD 78/79.
If the insured item has only a certificate by a suspect lab, the valuation is probably inflated.
If the valuation on a certificate is much higher than the purchase price, the valuation is probably inflated.
In pricing a replacement, use descriptive information from the certificate or appraisal to get competitive bids. Don’t automatically turn to the seller for replacement.
In Australia I have found it very difficult to buy a diamond from a on line store.
The main reason is few sell with real certificates, I was offered a stone by Jogia diamonds in perth, with a Bauer certificate.I never heard of this certificate and nobody recognizes it .The advice I got was to stay away from sellers like this. and stick to gia
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Consumer confidence
I received a call this morning, one which we get on a regular basis.
The question is always the same, and our answer is always the same.
It usually starts with, "I am buying a diamond how can I be sure that I am getting what I am told".
the answer is simple.
No matter where you are buying a stone you need to firstly make sure the retailer is reputable.
A good way to determine this, is by the certificate they provide you with the diamond.
If you are offered a certificate from a reputable laboratory that is recognised by the world associations you can be sure you are getting what you are told. And dealing with a reputable retailer.
If you are offered a bogus certificate or an in house certificate of valuation you should shop elsewhere.
This advice to be simple and seems logical, YET we constantly see consumers who have been caught out.
Why is this?
Well today, I would like to share what we see.
The consumer is sceptical and mistrusting by nature,YET
when they are involved in a emotional purchase and at their most vulnerable, the sharks come out to feed,playing on the feeling of the moment and the feeling between the couple.
It takes very little to convince a first time, uninformed person that they are getting a great deal, especially with very official looking paperwork.
This always ends in tears and usually the feeling is they will never trust again.
It is amazing that a few unethical traders who perpetuate these problems bring doubt on to the industry as a whole,and my personal view is that we should stand together and get rid of them once and for all.
Point out the pit falls to your customers, they do appreciate it.
Michael Cohen
Diamond Certification Laboratory of Australia
Suite 1, Level 1
133 Castlereagh Street
Sydney, 2000
Tel: 02 9261 2104
Fax: 02 9261 4263
www.dcla.com.au
info@dcla.com.au
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Certification
It is very important that when choosing from a selection of loose diamonds to review the diamond certificate, referred to by diamond grading laboratories as a grading report. This is your assurance that you are getting a diamond that has been graded for color and clarity from an experienced gemologist. Never buy a diamond that does not have this report or has a certificate from a lab with lower color and clarity grading standards.
Some diamond merchants will offer what they term “In house appraisals/certificates” in an attempt to justify the color/clarity grade, as well as the dimensions and characteristics of their loose diamonds. These reports are analogous to the fox guarding the hen-house and will not provide you with any guarantees on the accuracy of the purported diamond color or clarity grades. Additionally,this type of an “appraisal” may very well be inflated causing you to pay higher premiums than is justified.
Independent Grading Laboratories
You should always insist on certified diamonds that have been graded by an independent and unbiased grading lab. This kind of certification is the only way to confirm that you are getting what you paid for with the size, color, clarity, dimensions, and properties of the loose diamonds.
Are all Independent Grading Laboratories Created Equal?
The answer is an emphatic NO!
There are Independent Diamond Grading Laboratories out there whose grading standards, criterion, and competence are lacking. These laboratories are known for routinely grading diamonds at 1-2 Color/Clarity grades higher than actually warranted. You are paying “more” for “less”.
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Why is it unethical for a jeweller or a diamond dealer to certify their own diamonds?
The most obvious reason is the ethical position. If the certificate or diamond grading report has not been independently certified it would represent a conflict of interest. If the seller is grading their own diamonds they will always be more lenient and biased towards the better colour and clarity grade because of the difference in value the diamond would achieve.
For example, if the diamond was a G colour with a VS2 Clarity and the diamond was up graded to F VS1 this could represent an added value of 20% for a 0.50 carat diamond or 22% for a 1.00 carat size diamond. This may not seem like a lot at first glance but if you are selling 5 diamonds a week and they are bringing in an extra 20% because of what is known as "grade bumping", it can certainly amount to alot over a period of time.
In certain grades such as D-F or IF- VVS2 the differences in price are much greater.
A 1.00 carat diamond in a D IF is around $18900 USD per carat and a 1.00 carat diamond in an E VVS1 is around $12300 per carat at today's prices. So you can see that a little grade bumping here and there, can be, and is very profitable.
This is the reason why the world jewellery and diamond governing bodies such as CIBJO and the WFDB do not permit jewellery or diamond dealer members to have cross ownership or interests in diamond grading and coloured gem laboratories.
There is also the undeniable fact that some diamonds are treated or enhanced in some way, and these diamonds are very difficult, and in some cases impossible to identify, without the correct laboratory equipment.
Synthetic diamonds are the latest threat to the uneducated consumer. If you are buying a diamond with out a recognised certificate (IE; a certificate recognised by either the WFDB, IDC, or CIBJO) it is possible that it may not be a Natural diamond at all.
These are a couple of reasons to insist that your jeweller supplies you with a diamond grading certificate from an officially recognised laboratory.
Make sure the certificate you are offered is recognised, please visit http://www.independentlycertifieddiamonds.com/ for a list of compliant laboratories.
It is up to you the consumer to ensure that the diamond grading certificate is recognised.
Protect your self and only shop where independent recognised diamond certificates are supplied. The rule is, if you have to ask for one without the diamond vendor being forthcoming, shop else where.
Now how do you identify the rogue sellers? Well they will market non compliant diamond grading certificates along side official recognised and accredited diamond grading laboratory certificates in order to lend credibility.
Unethical diamond vendors misrepresent the diamond facts with non compliant diamond grading reports and/or diamond certificates.
Deceptive diamond grading laboratory certificates from "labs" that sound reputable should not
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Shenoa, Royal Ice, NGL appraisal … liers, cheaters, scammers, …DON’T EVEN THINK OF BUYING FROM THEM!!! Run the other way!!! Don’t even think of buying from these people. They promised me 2 pairs of beautiful studs totaling $23,000 but the quality turned out to be so poor that I did not even try them on!!! They were supposed to be eye clean but were instead full of inclusions they did not even sparkle. I then returned them in a couple of days but, instead of a refund, they are trying to offer me a store credit! Why would I want credit from a store I no longer trust??? They claimed it was because I returned it late but this is ABSOLUTELY FALSE as I returned it only a couple of days after receiving it (THE day they provided me their return information). I had purchased 2 beautiful rings from them 5 years ago totaling $50,000. They are clearly not the same people I delt with then. BTW, Shenoa and Royal Ice are the same people, with the same phone number and address!! I am also convinced that the NGL is connected to them and can issue any thing they darn please!!
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I wished we could get together I am having the same issue with the company.
I think if we all got together we could get something done they still have our money too over 8000.00 I am about to File with the NY att general.
Please contact the Attorney General in NY...Maybe we can get something done.
They sent me a bogues certificate also
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Found this http://www.icestore.com.au/IceCert.htm
ICE diamonds shipped to AUSTRALIA and will usually be Independently Certified by GSL (Gem Studies Laboratories) or BGL (Bauer Gemmological Laboratories
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"... most people who know the GIA cut parameters agree that their grading just plain stinks"
: Nikhil Jogia of Jogia Diamonds International
" The purpose of the lab and all the equipment in it is not to replace a GIA certificate, but rather to add value and instill confidence in our diamonds "
: Nikhil Jogia
Diamond Guru: Instil confidence ??????????????????????????? Isn't that the purpose of an accurately graded diamond with a certificate from a recognised compliant diamond grading laboratory?
" Since we have a colorimeter and Megascope, we are able to grade the colour and cut of a diamond "
: Nikhil Jogia
Colourmeters are a convenient indicator but are NOT accurate. The colour grade of a diamond can be effected by fluorescence, inclusions, the make and the hue of the diamond if it has brown or grey overtones.
All respected diamond grading laboratories worldwide still colour grade diamonds with their own eyes using a registered diamond colour master set for colour comparisons.The difference in colours or lack of colour can translate into thousands of dollars.
The cut grade depends on the different philosophies employed by individual diamond grading laboratories in regard to their own cut grade parameters. It can be confusing. This is why viewing a diamond is paramount rather than analysing a diamond by the specifications mentioned on a grading report. Those diamond vendors who carry no stock but drop ship diamonds or are consignees of diamonds are not providing their clients satisfactory service.
Providing Messrs Jogia only uses this information in conjunction with a grading certificate from a compliant lab it is acceptable but superfluous.
~~~
However we are bemused that despite rubbishing GIA, Mr Nikhil Jogia is still willing to sell GIA graded diamonds.
What we are unable to understand despite advocating GIA and AGS, both compliant , Messrs Jogia advertise they retain the services of two NON compliant diamond grading " Labs " in Australia namely Bauer Gemmological Laboratories and Gem Studies Laboratory.
It's like running hot and cold water. There is no consistency in his etiquette. Chopping and changing according to each individual situation.
Those who try to instil false confidence in the buyer by retaining the services of a non compliant diamond grading laboratory are jeopardising their reputation. Buyers Beware.
~~~
Diamond certification rulings since 1975 have been set down by the WFDB and IDC with help from CIBJO.
There is, and has been for some time now, an international diamond grading standard recognised by the majority of the diamond industry worldwide. The World Federation of Diamond Bourses (WFD
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Very interesting reading.
Non Compliant Diamond Grading Laboratories in Australia
The world jewellery and diamond governing bodies such as CIBJO and the WFDB do not permit jewellery or diamond dealer members to have cross ownership or interests in laboratories
ADGL Brisbane - Australian Diamond Grading Laboratory
http://www.adgl.com.au/
Read More about ADGL
Auscert Melbourne -Scientific Gem Testing Laboratories (SGTL for short)
http://www.auscertdiamonds.com.au/
Read More about Auscert
GSL Sydney - Gem Studies Laboratory
www.gem.org.au/gsl.htm
BGL Melbourne - Bauer Gemological Laboratories
http://www.bauergemlabs.com.au/
As far as we know , none of the above organisations are recognised by the World Federation of Diamond Bourses, IDC (International Diamond Council) or CIBJO.
IT IS THE DIAMOND BUYER'S OWN RESPONSIBILITY TO EXERCISE CAUTION WHEN PURCHASING A DIAMOND
Deceptive official looking diamond grading laboratory certificates from "labs" that sound reputable shouldn't be trusted. Neither should any merchant who presents one.
Exercise caution if the diamond vendor / retailer / wholesaler or non compliant "diamond grading laboratory" is a member of the JAA (Jewellers Association of Australia)
CIBJO Laboratories
We recommend as a precaution to ask for a second opinion from DCLA who are based in Sydney should you be considering a diamond that is certified by one of the above mentioned laboratories.
DCLA is one of only five laboratories worldwide recognised as an International Diamond Council (IDC) laboratory and DCLA is the official CIBJO laboratory for Australia and holds the official registered National Diamond Masterset for Australia.
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