Martin Rapaport Raises Con­cern About Over-grad­ing Di­a­monds

Solitaire - - SPECTRUM -

Martin Rapaport, an in­dus­try an­a­lyst and chair­man of the Rapaport Group, re­leased a com­pre­hen­sive ed­i­to­rial ti­tled “Hon­est Grad­ing” that dis­closes the over-grad­ing of over 100,000 di­a­monds, val­ued at more than $1 bil­lion dol­lars. The re­port ac­tively speaks out against the mis­rep­re­sen­ta­tion of di­a­mond qual­ity in re­ports.

Set­ting an ex­am­ple, Rapnet delisted EGL In­ter­na­tional (EGLI) re­ports from its web­site with ef­fect from Oc­to­ber 1, 2014. The di­a­mond trad­ing web­site states that EGL re­ports com­monly use Ge­mo­log­i­cal In­sti­tute of Amer­ica (GIA) ter­mi­nol­ogy to de­scribe di­a­monds as four or more colour/clar­ity com­bi­na­tion grades higher than what the GIA would give the same stones.

“We op­pose the mis­use of GIA ter­mi­nol­ogy by ap­ply­ing al­ter­na­tive grad­ing stan­dards that over­state the qual­ity of di­a­monds. We support the GIA stan­dards as de­fined by the GIA grad­ing lab­o­ra­tory by its di­a­mond grad­ing re­ports,” a state­ment read. Fur­ther­more, the ar­ti­cle re­jects the false state­ment by EGL In­ter­na­tional di­a­mond grad­ing lab­o­ra­tory that there is no in­ter­na­tional stan­dard for di­a­mond grad­ing.

The Rapaport Group recog­nises that GIA and other lab­o­ra­tory di­a­mond grad­ing is based on hu­man eval­u­a­tion and is there­fore sub­jec­tive. A dif­fer­ence of one colour and one clar­ity grade be­tween di­a­mond grad­ing re­ports from the same or dif­fer­ent lab­o­ra­to­ries is within a rea­son­able tol­er­ance range, it noted.

Rapaport said it is an un­fair business prac­tice to com­mu­ni­cate the grade of a di­a­mond us­ing GIA ter­mi­nol­ogy while ap­ply­ing non-GIA stan­dards that sys­tem­at­i­cally over-grade the qual­ity of the di­a­mond.

“Con­sumers must be warned not to trust mis­lead­ing di­a­mond grad­ing re­ports and those that sell them. Sup­pli­ers must be held re­spon­si­ble for the qual­ity of the di­a­monds they sell. The di­a­mond trade must pri­ori­tise the pro­tec­tion of con­sumers above prof­its,” said Martin Rapaport.

Rapaport men­tioned that re­tail­ers too are ac­tive buy­ers of over-graded di­a­mond re­ports as it re­sults in greater prof­its. “The dam­age to the di­a­mond in­dus­try by the es­tab­lish­ment, ac­cep­tance and support of a cul­ture that pro­motes sys­tem­atic mis­rep­re­sen­ta­tion of di­a­mond qual­ity and the out­right cheat­ing of con­sumers de­stroys the di­a­mond trade from within. It is as in­sid­i­ous as an un­de­tected can­cer eat­ing away at the es­sen­tial moral fi­bre of the di­a­mond trade,” he noted.

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