Consumer Alert : EGL Diamond Reports

Posted on 9 Sep, 2016 by Paul Nilsson

Two of the largest jewellery trade supply channels in the United States have just announced that they will no longer list diamonds with European Gemological Laboratory (EGL) Diamond Reports. The reason given is, quote...

"We are concerned about the misrepresentation of diamond quality through the abuse of the GIA grading standard. 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 in their diamond grading reports."

The GIA (Gemological Institute of America) www.gia.edu  invented a diamond grading scale in the 1950s. This described diamond quality in terms of colour on a scale of D to Z, with D being absolutely colourless and Z a noticeable yellow colour, and clarity from Flawless to Included (Fl-VVS-VS-SI-I). Although it was designed for teaching purposes, over the ensuing years the system gradually became more and more accepted in sales situations.

The colour scale was set against a master set of colour comparison diamonds held by the GIA. The clarity scale is based on examination of a stone under 10x magnification by a trained grader under the correct lighting conditions for grading.

Today, the GIA grading scales have been adopted and accepted worldwide as the standard for judging diamond quality.

Unfortunately when GIA invented the grading scales they neglected to register a patent or trademark for them. This means that there is a loophole that legally allows less ethical Laboratories such as EGL to set their own standards but use the GIA terminology. It also means that less ethical retailers of diamonds can take advantage of this and by using EGL reports appear (falsely) to the consumer to have a competitive edge. Diamond buyers should be aware that EGL are not the only  Lab who engage in intentional overgrading of stones. At the end of this article I have listed some of the Diamond Reports that we believe are reasonably accurate.

It is a fact that Diamond Reports are opinions of quality only. They are not guarantees and the Labs, including the GIA, do not certify their grades. Each colour and clarity grade actually represents a range of quality. For these reasons it is generally accepted that a variation of one colour and/or clarity grade between Labs is acceptable, and we find actually quite common. The problem with EGL is their G colour VS1 clarity graded diamond could be a J SI2 when submitted to GIA or another quality Lab, In other words 3 or 4 grades out.

While we at GemLab NZ support and endorse the action by the wholesale diamond channels, we wonder why it has taken 20 or more years for them to have taken this stand. Thankfully, here in New Zealand there have been very few unscrupulous retailers who have taken advantage of consumers in this manner. It is our opinion that New Zealand consumers are already protected from the practice of selling with misleading Diamond Reports. Here is why...

CIBJO www.cibjo.org  is an international organization set up in 1972 with the aim of standardizing jewellery and gemstone descriptions in order to protect the consumer and thereby maintain confidence in the jewellery industry. Their diamond quality scales align with the GIAs in terms of colour and clarity although the terminology differs. The CIBJO diamond colour master set matches the GIA set.

New Zealand’s main jewellery body JWNZ www.jwnz.co.nz is a signatory to CIBJO. This means that consumer protection bodies such as the Ministry of Commerce and the Commerce Commission would defer to CIBJO (and therefore GIA) grading standards in any complaint or dispute situation. And this would be supported by the fact that the GIA standards in general are the most widely accepted by businesses around the world, whether they are aligned with CIBJO or not.

Therefore, our understanding of consumer law is that the likely discrepancy between EGL and GIA grading would have to be pointed out at the time of sale by a retailer who was using an EGL or any other incorrect Diamond Report in their sales pitch. 

On the other hand, many diamond sellers erroneously state that diamond buyers should reject any Diamond Report not done by the GIA or their sister organization the American Gem Society (AGS). The fact is that there are many other Diamond Reports that are as accurate as the GIA and in some cases more consistent. And in any case we believe consumers should always make their purchase decision based on how attractive the diamond it is to them, rather than the report.

Here at GemLab, as GIA trained diamond graders, we provide independent diamond quality reports for buyers and sellers of diamonds, and a verification service for existing diamond reports.

Here are some Diamond Reports, other than GIA and ourselves (GemLab), that our experience has shown are reasonably accurate. The list is by no means exhaustive.

International Labs : AGS, HRD, IGI

Australian Labs : AusCert, ADGL

International Suppliers : De Beers, Tiffany

NZ Suppliers : DCNZ, Premier, Quasar