Rapaport Honest Grading calls to end (EGL Int) overgrading

[Garry H (Cut Nut)]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

The only EGL I've ever sold was a 1ct pear, graded J/SI1. In reality, it was really an O/SI2 or thereabouts, but it was eye-clean and the customer loved it and it was the only stone available within their budget.

The trade is very efficient at adjusting the price of EGL (and every other certified stone) to its true value. I also suspect those buying EGL certed stones aren't "clued up" about diamond grading and the 4Cs, but simply want a stone that looks good to their eye.

I'm sure Mr Rapaport has good intentions, I think it's a bit unfair to single out one lab (or group of labs) for overgrading, especially when it is entirely possible that those that regularly deal with EGL certed stones *may* be providing better value than GIA certed stones.

FWIW, I think GIA should have patented their grading systems so no other lab could have used them. This would have avoided this problem. AGS has their own scale, so do HRD (IDC). I don't see why other labs can't develop their own scales, especially in a more consumer oriented fashion.

I don't think Martin Rapaport would have blown this matter up if every single jeweler in the trade is blatantly honest about EGL diamonds and "adjusts" the value of the diamond to reflect a fair value and price the consumer should be paying. Unfortunately in real life, most jewelers do take advantage of consumers who don't know better.

This is the point that strikes me most-

To give context I went to NYC to look for my upgrade stone, and purchased from a very reputable dealer known on pricescope. He showed me GIA Stones in the H-I-J SI1 range and EGL stones in the F-G-H VS1 range, and had them priced for all intents and purposes fairly equally. There was a stone that was EGL graded that was pleasing to my eye ( I knew the color grade was not an F, more like an I or J) but he had it priced as if it was an I or J, and I felt that was fair. Again it would be much better if most jewelers were honest about the difference like this person was, but getting back to the point- does this mean every EGL stone is going to be sent to GIA or AGS for regrading? Or is it just the jewelers are going to be held more liable to disclosing what the GIA "true" grading would be, which is what happened in my situation?

Dolly Julie, You were lucky because the vast bulk of stones sold with EGL paper are sold at retail stores to people who either did not do their homework (i.e. check online and see the huge price difference) or to people who use the 'naming rights' to tell their girlfriend or whoever how generous and quality minded they are.
By taking these stones off-line Rap has also taken the data feeds that we appraisers use to accurately inform consumers - a bit of a problem.
There have always been bottom feeder stores selling un-lab-graded stones as overgraded. What rap has now done though is brilliant - he has gone that step further (because the EGL stones were still listed on RapNet as 'other' and still over graded) and said he will support traders to get refunds on stones that come back from GIA EITHER one grade lower for color OR clarity. THAT IS A PRETTY TIGHT RULING as many times the dealer challenges GIA's initial grade (at a cost) and gets an upgrade - so the new owner probably will not bother on that front, and GIA is really not that consistent.

If Rap moves a step further so the stone owner has to pay all additional costs and give a refund - well that can really hurt the overgraders.

Finally - remeber that many stones with EGL paper also have a GIA or other report as well - so it is not as disruptive as it seems.

 

[Garry H (Cut Nut)]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

The next question is what should we do on Pricescope?
IDEX is still listing EGL - so there will still be trade feeds for Drop Shippers.

We could for example impose a variant of Rap's ruling that vendors who list stones should be made to refund stones that fail some test (e.g. send to GIA and fail the one grade drop test?)
Or make a penalty payment to the drop in value if the stone was sold at its GIA equivalent price. all complex and messy - but the idea that a dealer knows what the stone really IS - thats a no-brainer

 

[John P]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

EGL-USA is a very well equipped lab with some highly skilled gemologists. The problem is a conflicted business model. A name change and a clarifying of the business model is probably in order...

They should have changed their name long long ago Niel!...

Remember when Branko was working at EGL USA? What a brilliant man. I had a similar dialogue with him... I gather that there is great reluctance to change the masthead.

Sarin Technologies was increasingly bothered by name-association concerns, scrutiny and hassles as well.

...Viola: http://sarine.com/

If consulted, I'd recommend that EGL-USA reinvent themselves as "Eagle USA" Laboratories. A small change, it maintains existing letters and phonics, rids them of the "EGL Int" association and brings an iconic, USA-centric emblem with it.

 

[Texas Leaguer]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

EGL-USA is a very well equipped lab with some highly skilled gemologists. The problem is a conflicted business model. A name change and a clarifying of the business model is probably in order...

They should have changed their name long long ago Niel!...

Remember when Branko was working at EGL USA? What a brilliant man. I had a similar dialogue with him... I gather that there is great reluctance to change the masthead.

Sarin Technologies was increasingly bothered by name-association concerns, scrutiny and hassles as well.

...Viola: http://sarine.com/

If consulted, I'd recommend that EGL-USA reinvent themselves as "Eagle USA" Laboratories. A small change, it maintains existing letters and phonics, rids them of the "EGL Int" association and brings an iconic, USA-centric emblem with it.

Brilliant John. The question is who is going to register the domain eagleusa.com first!

 

[Garry H (Cut Nut)]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

EGL over-graded years and Rapaport did not block EGL diamonds in previous years.
Rapaport opened grading service in this year.
10-20 years ago GIA refused attempts to create international grading standard.

Sergey the grading issue did get worse over the past 2-3 years.
And GIA made the best ever business decision in opting out of that co-operative plan.

I do not see why the US government continues to let them operate as a tax free entity though. That is clearly an FTC issue on competiveness, just as it is in the case of IKEA, Apple, Google et al

 

[Texas Leaguer]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

The next question is what should we do on Pricescope?
IDEX is still listing EGL - so there will still be trade feeds for Drop Shippers.

We could for example impose a variant of Rap's ruling that vendors who list stones should be made to refund stones that fail some test (e.g. send to GIA and fail the one grade drop test?)
Or make a penalty payment to the drop in value if the stone was sold at its GIA equivalent price. all complex and messy - but the idea that a dealer knows what the stone really IS - thats a no-brainer

Garry, I am very glad to hear you asking this question. It is a thorny issue but one that Pricescope should address decisively (and fairly). Pricescope has a magnificent reputation for the best in consumer education and protection. This is an opportunity to reinforce that message to the market.

 

[denverappraiser]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

A name change would help. A merger or acquisition of or by a better regarded brand would help too. A phone call to HRD, AGS or, God forbid, Raplab might be in order. How about this?: Call up PGS in Chicago (they were the operators of the old EGL-LA, back when the EGL reputation wasn’t so in the tank).

They’ve got the tools. They’ve got the staff. They’ve got the addresses. They’ve even got the customer list. There’s a deal here if people are just creative enough to put it together. Call me. I'll help.

 

[diagem]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

The next question is what should we do on Pricescope?
IDEX is still listing EGL - so there will still be trade feeds for Drop Shippers.

We could for example impose a variant of Rap's ruling that vendors who list stones should be made to refund stones that fail some test (e.g. send to GIA and fail the one grade drop test?)
Or make a penalty payment to the drop in value if the stone was sold at its GIA equivalent price. all complex and messy - but the idea that a dealer knows what the stone really IS - thats a no-brainer

Idex are attempting to enter the vacuum left by Rap's decision. There is pressure from the industry for such a platform!
I must admit I am surprised at their decision to keep playing the overgrading game.
Does PS have a similar agenda? I don't think so.
Sometimes brave decisions are needed..., I think we are at one of those cross points.

Let's face it, overgrading did just become a poison pill.

I think we all know the answer to your query.

 

[denverappraiser]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

I’m fine with the high road but I don’t give so much of a pass as some of you folks. This is a hydra that is, at least in part, of Rapaport’s own making.

Rap’s pricing grid uses shape (two choices), weight range (chosen from 18 options), clarity (11 options) and color (10options). That gets multiplied by the weight to get the ‘Rap’ price.

That’s then modified with a premium or a discount depending on off-cert variables like cutting, location, financing, branding and so on in order to get to the final price. Dealers can charge whatever they want, they offer whatever value-add they want, and they’re welcome to use other characteristics like eye-clean, transparency, mine of origin or whatever they like if they want, but it’s an uphill battle. That’s the competition he’s talking about but it’s a distraction. Realistically, any dealer who wants to go at it a different way can expect troubles from both suppliers and customers. Rap is driving the bus.

Rap provides a search engine rather like Pricescope’s that makes the first part easy although this is exactly what he’s complaining about. Obviously it’s dependent on the reliability of the data going in or it’s meaningless. Garbage in = garbage out. He’s pointing at GIA for providing the above system but, in practice, much of it comes from him. For example the price premium for 0.70cts. That’s a 20-25% bump that has nothing whatever to do with GIA. Even people who don’t price using Rap are locked in because they are pricing based on comps that were priced using Rap supplied data (either the Rapnet platform or the Rapaport magazine). For the most part people don’t have access to actual sales data beyond their own but ASKING prices are easy to get. Sellers price themselves in relation to those other offers. The result is that even people who aren’t Rap subscribers are using his approach. There is no choice.

 

[denverappraiser]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

Here's an open letter sent to clients from Mitch Jakubovic, director of EGL USA in response to Mr. Rapaports article:

--------------------------------------------------------------------------------------------------------

The Truth about Honest Grading: An Open Letter to Martin Rapaport


November 10, 2014, New York, NY — In response to Martin Rapaport’s article, “Honest Grading,” in the November 2014 issue of Rapaport Magazine, Mitch Jakubovic, director of EGL USA, has issued the following open letter:

Mr. Rapaport,

Like you, all of us at EGL USA believe that honest, accurate gemological grading is essential. And, like you, we are extremely concerned about EGL International’s apparent disregard for it.

As you know, we’ve been engaged in a 10-year federal court battle — fighting EGL International’s flagrant practices of unfair competition and inflated grading. We pursued this action to protect both the integrity of our work and the interests of our customers and final consumers. The judicial decision — which is imminent — could literally make EGL International reports a thing of the past in the US.

In addition, through the years, we have repeatedly asked you to protect the industry by delisting EGL International. Recently, at long last, you heeded our plea. For that, we thank you. However, your simultaneous decision to dismiss EGL USA and issue defamatory statements about our work is simply unconscionable and unacceptable.

We are outraged by your contention that EGL USA is “aiding and abetting” the sale of EGL International reports.

EGL USA has been fighting the good fight for years, while others — including you — have continued to promote, publicize, and profit from EGL International. We can’t help but wonder how much aiding and abetting was provided by RapNet listings for the “hundreds of thousands of diamonds worth billions of dollars … sold to consumers with overgraded reports.”

Adding insult to injury, you claimed that your policy is to “work with good laboratories” and, unfortunately for EGL USA, you are “not sure” about how good we are.

Allow me to refresh your memory: For nearly four decades, EGL USA has provided exceptional gemological service. Just last year you yourself published a survey, “Grading the Graders.” In it, you confirmed that our standards are “comparable” to those of GIA and IGI, two decidedly “good” labs that you work with every day.

If there is confusion in the marketplace, you have certainly contributed to it. And we hope, as an industry leader, that you will finally use your power to improve this situation, instead of making it worse. But rest assured, whether you do so or not, whether you right the wrong and reinstate us or not, we will carry on.

All of us at EGL USA are proud of our outstanding work and our name. And we are incredibly grateful for our loyal customers. We will continue to serve them, working with other fair-minded trading platforms, to promote and protect genuinely honest grading.

Sincerely,
Mitch Jakubovic
Director of EGL USA

 

[Karl_K]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

What else would you expect egl usa to say? woops our bad.
There are too many verified reports of over grading on reports from them for me to have any sympathy for them.

 

[Texas Leaguer]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

What else would you expect egl usa to say? woops our bad.
There are too many verified reports of over grading on reports from them for me to have any sympathy for them.

Karl, according to Rapaport's own survey EGL-USA had an accuracy score slightly less that GIA and IGI but better than HRD. (AGS was not included in the survey). This is a quote from the article at the link below:

The survey therefore ranks the GIA as the strictest of the labs, followed very closely by IGI and EGL USA. The scores of these three labs were sufficiently close to suggest that the U.S.-based labs are working within comparable boundaries, while the non-U.S. labs are applying more lenient standards

Therefore it is a surprise that Rap would ban EGL-USA along with the non-US based EGL labs. It seems very unfair to me unless Rap has other evidence of unethical grading practices at EGL-USA that they have not published.

Here's the rap survey article. It contains other interesting insights about this issue.
http://www.diamonds.net/News/NewsItem.aspx?ArticleID=43417

 

[John P]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

Therefore it is a surprise that Rap would ban EGL-USA along with the non-US based EGL labs.

Here's his commentary about that in the video.
See time-index 15:13

https://www.youtube.com/watch?v=xwPv8HjQ4DY

Confusion Is Not Acceptable [ 15:13 ]
> Why were all EGL labs banned from Rapnet?
> Because there are 12 EGLs with different standards between them.
> Confusing consumers on color and clarity is bad enough.
> They cannot possibly differentiate between all these EGLs with different standards.

Whether right or wrong; condemnation-by-association. As others have said, a name-change would surely help their case.

Video synopsis here, for any interested.
https://www.pricescope.com/community/threads/rapaport-honest-diamonds-video-quick-synopsis.207847/

 

[Texas Leaguer]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

Therefore it is a surprise that Rap would ban EGL-USA along with the non-US based EGL labs.

Here's his commentary about that in the video.
See time-index 15:13

https://www.youtube.com/watch?v=xwPv8HjQ4DY

Confusion Is Not Acceptable [ 15:13 ]
> Why were all EGL labs banned from Rapnet?
> Because there are 12 EGLs with different standards between them.
> Confusing consumers on color and clarity is bad enough.
> They cannot possibly differentiate between all these EGLs with different standards.

Whether right or wrong; condemnation-by-association. As others have said, a name-change would surely help their case.

I suppose I see the logic. If you want to take effective action to clear up consumer confusion about EGL, and put a stop to industry sponsored over-grading and level the playing field, you have to wipe the slate clean. Let all the labs that share that association reinvent themselves and begin operating in conformity to GIA standards. And let the action serve as a warning to all labs that they must redouble efforts to maintain the standards.

As I have said consistently, I do support a strong stand on the issue. I just feel bad for those that have been fighting the good fight and are caught in the crossfire.

 

[Karl_K]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

What else would you expect egl usa to say? woops our bad.
There are too many verified reports of over grading on reports from them for me to have any sympathy for them.

Karl, according to Rapaport's own survey EGL-USA had an accuracy score slightly less that GIA and IGI but better than HRD. (AGS was not included in the survey). This is a quote from the article at the link below:

Then why does almost every one in the trade have examples of over graded egl-usa reports?
There have been many examples posted on PS over the years from multiple vendors.

Also igi-usa does validation reports which are not on rap.
They are total garbage and graded set.
Any report that does not mention those is not telling the whole story.
They make igi just as unreliable as any egl report for the uninformed.

 

[Karl_K]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

Then why does almost every one in the trade have examples of over graded egl-usa reports?
There have been many examples posted on PS over the years from multiple vendors.

Also igi-usa does valuation reports which are not on rap.
They are total garbage and graded set.
Any report that does not mention those is not telling the whole story.
They make igi just as unreliable as any egl report for the uninformed.

That should be valuation not validation got bit by spell check.

 

[Garry H (Cut Nut)]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

Then why does almost every one in the trade have examples of over graded egl-usa reports?
There have been many examples posted on PS over the years from multiple vendors.

Also igi-usa does valuation reports which are not on rap.
They are total garbage and graded set.
Any report that does not mention those is not telling the whole story.
They make igi just as unreliable as any egl report for the uninformed.

That should be valuation not validation got bit by spell check.

There can be a bit of a gulf between the management and practices of companies that are spread over the globe. I know that IGI take their diamond grading consistency very seriously. Their valuation approach will reflect the demands of the markets (and the laws of the land). Sadly your FTC seems to get involved in things it maybe should not and ignores other practices.

 

[Rockdiamond]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

Since I like well cut cape stones, I have bought many diamonds with EGL Intl reports. At prices that related to the GIA grades.
A lot of well made M-N colors, were submitted to EGL Intl with the goal of getting H color. And it worked- or they'd get I color. If it was EGL Intl graded J it might be a U-V by GIA grading. It's just a demographic- in the higher colors, there's fewer well made stones with EGL paper.
We would always publish both the EGL and GIA reports to serve an educational purpose.

In the case of EGL Intl stones, most of the sellers now offer the stones on rap with no paper. if someone is looking for a $10,000 3ct diamond, they are not gong to change that aim due to this action by rap- so those stones are still going to sell.
It's important to mention that a diamond is not a bad stone simply due to the presence of an EGL report. Not to suggest consumers buy stones w/o GIA reports- but for those who own EGL graded stones now.

Anyway, I was just browsing a company on rapnet that has a lot of EGL goods- and I noticed that the Rap category "OTHER" now contains EGL-USA graded diamonds- and the reports. But no EGL INtl......interesting.....

 

[John P]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

Update:

EGL Int’l Shutting Down as Network Reorganizes
https://www.pricescope.com/community/threads/egl-int’l-shutting-down-as-network-reorganizes.208588/

 

[Texas Leaguer]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

Here is the latest episode in this saga:
http://www.diamonds.net/news/NewsItem.aspx?tc_dailyemail=1&ArticleID=50336

 

[John P]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

Here is the latest episode in this saga:
http://www.diamonds.net/news/NewsItem.aspx?tc_dailyemail=1&ArticleID=50336

Similar content, different coverage.

EGL network calling any new reports issued by the former EGL International “counterfeits.”
http://www.jckonline.com/2015/02/09...ernational-are-counterfeits-says-egl-network?

 

[Texas Leaguer]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

I wonder how much real muscle is likely to be put behind this threat:

"The EGL trademark rights owners reserve the right to prosecute anyone who makes use of such reports.”

Dealers and jewelers selling stones with EGL International certs would be at risk presumably. But how about websites hosting databases that include the inventories of companies marketing diamonds with these certs? At what level is a participant not considered an accessory (or whatever the proper legal term is)?

 

[denverappraiser]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

I wonder how much real muscle is likely to be put behind this threat:

"The EGL trademark rights owners reserve the right to prosecute anyone who makes use of such reports.”

Dealers and jewelers selling stones with EGL International certs would be at risk presumably. But how about websites hosting databases that include the inventories of companies marketing diamonds with these certs? At what level is a participant not considered an accessory (or whatever the proper legal term is)?

They've been having this fight for more than a decade with EGL-USA. As best I can tell, EGL-USA is winning. That's in US courts, of course. I haven't a clue how Israeli courts handle this sort of thing. No doubt we're about to find out.

 

[Rockdiamond]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

The Rappaport story mentioned a date- any reports published after 11/25/2014....so that would elminate all prior reports from prosecution, as I read it

 

[denverappraiser]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

The Rappaport story mentioned a date- any reports published after 11/25/2014....so that would elminate all prior reports from prosecution, as I read it

At least in the US, I think EGL-international reports are technically counterfeit. No? Is it even possible to have a counterfeit counterfeit?

 

[Texas Leaguer]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

The Rappaport story mentioned a date- any reports published after 11/25/2014....so that would elminate all prior reports from prosecution, as I read it

At least in the US, I think EGL-international reports are technically counterfeit. No? Is it even possible to have a counterfeit counterfeit?

Aside for whether it is good business or not, do you think it is wise for pricescope to continue to have them in their database?

 

[Rockdiamond]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

The Rappaport story mentioned a date- any reports published after 11/25/2014....so that would elminate all prior reports from prosecution, as I read it

At least in the US, I think EGL-international reports are technically counterfeit. No? Is it even possible to have a counterfeit counterfeit?

Aside for whether it is good business or not, do you think it is wise for pricescope to continue to have them in their database?

Great question Bryan!
The way I see it, this change is going to force sellers of EGL graded stones to either.
1) offer GIA graded M-N-O color stones that are now being offered as EGL H-I J
2) Offer them non certed- and possibly them tell the buyer verbally what EGL called it ( some sellers will try anything)
3) get of of the "promotional diamond" business

If it was me deciding, I'd wait to see how that aspect plays out.
There's still a lot of buyers who want cheaper goods.

In light of recent discussions abot cut, something comes to mind.
When I think of badly cut stones, EGL International springs to mind.
Not all- but a far high percentage of badly cut stones I see have EGL reports ( particularly EGL Intl), as compared to badly cut stones graded by GIA.
But of course there's plenty of bow wows with GIA reports as well.

 

[Gypsy]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

The Rappaport story mentioned a date- any reports published after 11/25/2014....so that would elminate all prior reports from prosecution, as I read it

At least in the US, I think EGL-international reports are technically counterfeit. No? Is it even possible to have a counterfeit counterfeit?

Aside for whether it is good business or not, do you think it is wise for pricescope to continue to have them in their database?

I don't.

 

[Texas Leaguer]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

The Rappaport story mentioned a date- any reports published after 11/25/2014....so that would elminate all prior reports from prosecution, as I read it

At least in the US, I think EGL-international reports are technically counterfeit. No? Is it even possible to have a counterfeit counterfeit?

Aside for whether it is good business or not, do you think it is wise for pricescope to continue to have them in their database?

I don't.

I don't either Gypsy. It seems to me that under the circumstances, having knowingly mis-graded diamonds offered in the database runs very much counter to what Pricescope has always stood for, which is accurate information and consumer protection. And it may even put pricescope at some risk of getting caught up in the legal fight that is heating up.

 

[diagem]

Re: Rapaport Honest Grading calls to end (EGL Int) overgradi

Here is the latest episode in this saga:
http://www.diamonds.net/news/NewsItem.aspx?tc_dailyemail=1&ArticleID=50336

Similar content, different coverage.

EGL network calling any new reports issued by the former EGL International “counterfeits.”
http://www.jckonline.com/2015/02/09...ernational-are-counterfeits-says-egl-network?

Paradox, is the only comment I can add...
Why even fight for the EGL name or right to issue certificates (as they themselves call their own grading reports).

And the question regarding PS database..., IMO there should not be such a Q.