Antwerp: In a signed, open letter, Ernie Blom, President of the World Federation of Diamond Bourses has warned that “overstated certification” or the practice of over grading by labs could cause a serious erosion of consumer confidence. In some cases he said, such a practice could also be construed as fraud and have criminal implications. Blom called for all member bourses to take immediate action saying “This is an industry problem that must be resolved by the industry in order to retain consumer confidence in our product and sustain and develop the international diamond trade.”
Further, Blom put out a compelling cohesive argument in his letter, including directives to members quoted verbatim below:
(a) Ethical grading and certification are the most basic principles of the industry and these cannot be compromised.
(b) As part of the sales transaction the seller of diamonds provides a guarantee to the buyer of what is being sold and this forms a binding contract between the two parties. The seller cannot later hide behind an overstated grading report claiming ignorance as he/she will be held responsible regardless of any grading report supplied with the diamond(s) being sold. Diamantaires cannot hide behind certificates with the excuse that these goods sell cheaper. There is a common standard of colours and purities, and it is not about price but quality.
(c) In blatant cases the misrepresentation can amount to fraud with criminal consequences, depending on a country’s consumer laws.
(d) Member Bourses must implement action in countries experiencing this kind of practice:
(i) If the offending party is a member, then the bourse concerned should take action under its own rules.
(ii) If the offending party is not a member, then the bourse concerned should report it to that country’s consumer rights regulator in order to protect consumers’ rights.
While committing the WFDB to ensuring a resolution to the problem urgently and quickly, Blom declared, “To this end a meeting will shortly be called of all the major laboratories to find common ground on the way forward.”
Not limiting his message to members of the WFDB alone, Blom reached out to other segments saying, “I call on all responsible stakeholders across the world to stand together to eliminate this practice as it will harm our industry in a way that could dwarf any previous problems faced by the diamond industry.”
