Colored Diamonds
"We can take your light brown and brown diamonds and transform them into beautiful Blue Fancy color diamonds."
As you can imagine, when it comes to desirable gems, brown diamonds are at the bottom of the heap. A diamond supplier with a cache of low cost brown diamonds simply has extra baggage.
Technology to the rescue: In a lab, these low-priced stones can now be turned into attractive and desirable gems. The labs don't make those yellow and brown diamonds crystal clear; they make them deeply colored.
In general, the finest and most expensive diamonds are totally without color, like a drop of water. "Color" in diamonds usually means a yellowish or brownish cast; it is an unattractive attribute, signaling low quality and low value.
But intensely colored diamonds are a completely separate matter. Diamonds exist in rich blues, greens, reds, and even black. They are called fancy colored diamonds, to distinguish them from low-quality brown and yellow stones. These intensely colored diamonds are extremely rare in nature and very valuable.
Technicians can now treat low-quality diamonds to produce intense, highly colorful stones. "We can transform your cheap cape [yellowish] goods to rare green diamond shades," enticed one gem enhancement lab. The transformation is usually done by subjecting the stone to high temperature, high pressure, and/or radiation.
It is extremely difficult, even for professional gemologists, to distinguish the color-enhanced diamonds from naturally colored stones. This is the danger for consumers and insurers: if the treatment is not disclosed, a low-cost diamond is passed off as a rare and expensive one. As one lab promises, "you make much more profit because of what we call 'illusion effect'—no one is able to determine the exact value of your diamonds before the enhancement took place."
The Pegasus color treatment, developed by General Electric, entered the market a couple of years ago. Pegasus uses high temperature and high pressure, accelerating the natural processes that would take thousands of years in the earth. GE has made the decision to inscribe the girdle of their treated stones with "GE-POL" (Pegasus Overseas Limited), to avoid confusion with untreated diamonds. However, some stones have turned up with the laser inscription partially polished off, obviously a deliberate attempt by some gem supplier to pass off the color treated diamonds as naturals. Also, the girdle—the thin edge on the circumference of the stone—is usually concealed when the stone is mounted. In jewelry, treated diamonds could be passed off as untreated stones by an unknowing or unscrupulous retailer.
With assistance from GE, the GIA has been able to detect the Pegasus treatment. Detection requires sophisticated equipment not within the means of the average jeweler/appraiser, but gems can be sent to the GIA for a determination of Pegasus treatment.
Other enhancements that produce rich colors still escape detection. Rich greens produced through irradiation are particularly difficult; irradiation in the lab seems to have the same effect as irradiation in the earth. To gemologists using current methods and equipment, irradiated stones look the same whether naturally or artificially colored. In this case, scientists are turning to the Dresden Green diamond, a natural diamond of over 40 carats that has a historical record dating back to 1726, long before the advent of artificial irradiation. By comparing the Dresden Green, known to be natural, with other green diamonds known to be artificially irradiated, scientists hope to discover differences that will help them detect artificial irradiation.
FOR AGENTS & UNDERWRITING
In insuring diamonds, remember that diamonds of intense color are rare in nature. Those of exceptional quality are very expensive and considered collector's items. Intensely colored diamonds you encounter are likely to be artificially colored and not as high in value as natural fancies.
Every colored diamond of significant value you insure should have a GIA Diamond Certificate as well as an appraisal. If a color treatment is detectable, it will be disclosed on the diamond certificate. Be sure the Diamond Certificate is for the diamond being insured—that is, be sure the dimensions on the certificate match those on the appraisal. Also, be sure the Diamond Certificate is issued by the GIA (Gemological Institute of America), the recognized authority on diamond grading. Beware of scams in which impressive-looking certificates are issued by non-existent entities or by organizations without recognized authority and expertise in this area.
FOR CLAIMS
Artificially coloring diamonds is an inexpensive treatment, and a fair price for a color-treated stone is well below—even hundreds of times below—the price for a naturally colored diamond. With a claim on a fancy colored diamond of high value, if the appraisal does not specify that the gem was artificially colored, do a careful check before settling the claim. You'll want to be sure the stone was not an off-color (and low value) brown or yellow that was misrepresented as a fancy cognac or canary.
- Order a credit report on the jeweler/appraiser from a firm such as Dun & Bradstreet or Jewelers Board of Trade. This will tell how long the firm has been in business, the value of the business based on capitalization, and the firm's credit rating.
- Look at the jeweler's inventory. Ask him to compare loose stones on hand. Ask about the kind of stone in the claim, as though you are trying to educate yourself and appreciate the jeweler's help. Does the jeweler deal in this quality of merchandise? Does he have other fancy colored diamonds in stock? Is the store in a neighborhood where this quality of merchandise would attract buyers?
- Does the jeweler have formal gemological training? He should have at least a Graduate Gemologist degree and a gem lab.
- If you are suspicious, have a Graduate Gemologist check other non-lost items on the appraisal for accuracy.
- Check whether this jeweler or appraiser has been involved in other questionable claims. If it turns out that you cannot substantiate that the lost stone had a bogus valuation but you are still suspicious, keep the jeweler/appraiser's name on file. The next time the same name comes up, the underwriter can ask for another appraisal, and the insurer will not be victimized by the same unethical retailers.
CIA™ CORNER
From Lee Davis, CIA™:
A man brought in a blue diamond he had just bought, to have us confirm that it was a fancy. We examined it with a spectro-photometer and found it to be irradiated. Actually, with blue diamonds, irradiation is easy to recognize even without using a spectrophotometer. But with other colors, especially green diamonds, artificial irradiation is very difficult to detect. It is the jeweler's responsibility to disclose artificial coloring, and this jeweler had not done so, maybe because he lacked the gemological training to recognize the treatment. In this case, the customer was able to return the jewelry and get his money back.
Lee Davis
Seng Jewelers
453 Fourth Avenue
Louisville, KY 40202
502.585-5109
UPDATE!
Laser Drilling Must Be Disclosed
The FTC has ruled that jewelers and manufacturers must disclose all laser-drilled diamonds. The new ruling, effective April 10, 2001, requires disclosure of any treatment that "significantly affects the value of gemstones."
As discussed in the April 2001 IM News, some diamond dealers have argued that laser drilling is a manufacturing process, similar to using lasers to facet a stone. Laser drilling is always done to conceal a flaw, however, and many jewelers refuse to carry such stones.
Consumer advocates and members of the jewelry industry had pressed for the change in the FTC Guidelines. Initially advocates objected to the word "significantly," fearing that unscrupulous retailers could argue that a treatment was insignificant, and therefore need not be disclosed. However, the FTC Guides state that, in these cases, "the consumer's point of view is the relevant viewpoint." The Commission suggests that, in deciding whether a treatment should be disclosed, "retailers could ask themselves how a consumer would react if he discovers this treatment after he leaves the store (for example, when he takes the stone to an appraiser or attempts to sell the piece)."
©2001, JCRS Inland Marine Solutions, Inc. All Rights Reserved. www.jcrs.com
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