Avoiding Diamond Rip-offs

Before purchasing a diamond, consumers often navigate a minefield of dazzling discount offers, diamond imitators, unfamiliar lingo and if they're not careful, slippery diamond sellers.

Good Morning America's Consumer Correspondent Greg Hunter ran right into a diamond ripoff when he headed to New York's fabled 47th Street Diamond District with a hidden camera and a well-known jewelry expert disguised as a buyer. They wound up with a fracture-filled diamond that should have cost about a third of the $3,220 they paid for it.

And the experience is not uncommon.

"Wholesale districts are not a good place for the unknowing and the unsuspecting," said Antoinette Matlins, the jewelry expert who worked with Hunter, and the author of Jewelry and Gems, The Buying Guide. "You're hoping to find something much cheaper, but when the price is much lower, beware: there is something you do not see."

Learn the 4 C's of Diamond Buying A diamond engagement ring in the size range of 1.25 to 2.5 carats can run anywhere from about $5,000 to $15,000 depending on the quality.

Matlin's advice: before you make this (hopefully) once-in-a-lifetime purchase, know your 4 C's (cut, color, clarity and carat), exercise caution and deal with people who have recognized credentials. Any important diamond should be purchased unmounted, and it should be mounted in a setting only after all of the facts about that diamond have been verified.

"Know what questions to ask and get the answers to those questions in writing on the sales sheet," Matlins said. "In my experience, whenever a seller is not willing to do that, walk away. Either they are dishonest, or they are not knowledgeable. Either way, walk away."

Though some jewelers will sell diamonds with simply a sales certificate, most diamonds over one carat are sold accompanied by diamond grading certificates from gemological laboratories. The most widely used laboratory in the United States is the Gemological Institute of America's Gem Trade Laboratory. Two other highly respected labs: American Gemological Laboratory and the European Gemological Laboratory.

The jewelry industry is primarily made up of independent, mom and pop-style retailers, in business for generations. But they will be the first to acknowledge that ripoff artists exist in their midst, and that the dishonest jewelers are often the ones hiding behind the discount offers.

After purchasing a diamond, Matlins suggests getting the diamond independently appraised by a lab or individual who is certified by the American Society of Appraisers the American Gem Society, or the Independent Gemologist Appraisers.

The Jewelers Vigilance Committee in New York keeps tabs on jewelers all over the country, and is happy to steer consumers toward ethical retailers and appraisers.

"If they refuse to put the color, the clarity, the cut and the cost in writing, walk out," said Jo-Ann Sperano, of the JVC. "Take it to an independent appraiser. Tell your jeweler you're going to call the JVC and get a gemologist appraiser to look at the diamond. This will only make a thief upset — a legitimate jeweler will be glad."

Through the Microscope

Because of the popularity and beauty of diamonds, there are stones on the market that look a lot like diamonds, but aren't. There are also flawed diamonds that are treated or clarity enhanced to hide cracks and improve their appearance. And the General Electric Co. has recently come up with a way to improve the color of certain types of diamonds through a high heat and pressure process.

Cubic zirconia, and a newer, pricier man-made gem called moissanite are diamond imitators that masquerade as natural gems but are actually made in the lab. The stones are normally sold as such, but there is always the risk of unscrupulous sellers passing them off as diamonds.

Knowledgeable jewelers can use instruments to tell the difference between the man-made stones and natural ones. Usually.

"The only difficulty we have with identification is when they are encased in bezel settings or multi-jewel settings," said Albert Solomon, of Solomon Jewelers in Plainview, N.Y. But generally, the loose stones can be identified using a loupe or a gemiscope, tools that his customers use to view diamonds with as well.

Solomon, who is a member of Jewelers of America, suggests that consumers look for reputable jewelers who are also members of J.A., a national organization with over 10,000 members.

Diamonds with Extra Dressing Jewelry experts can also use special instruments to spot diamonds that are enhanced.

Two common methods of enhancements are fracture-filling and lasering, and if your diamond has been enhanced in either manner, you should pay less for it than you would for other diamonds.

"Any legitimate jeweler would always disclose either of these treatments to the consumer," Solomon said.

Fracture-filled diamonds have cracks visible to the naked eye, which are filled with a glass-like substance that makes the cracks disappear except when viewed under a microscope.

If a fracture-filled diamond is treated with kid gloves, it might remain as beautiful as it is the day you buy it. But stray from the special care instructions and the filler can evaporate or change color, making the diamond much less attractive.

"If somewhere along the way, they break a prong and the ring needs to be repaired, there's problems," Solomon said. "In almost all cases the fracture-filling disintegrates and all of the cracks are visible."

Laser treatment is used to vaporize black inclusions (cracks) in a diamond so that they practically disappear. Since the treatment is permanent, jewelers tend look on lasered diamonds more favorably than fracture-filled ones. And jewelry experts can identify lasered diamonds with a microscope, which shows the path the laser cut into the diamond.

Yet another treatment, developed through new technology by G.E., uses a process to improve the color of diamonds so that they are closer to colorless. The process is thus far undetectable, but the company is touting the enhancement as permanent.

The G.E. stones are inscribed to distinguish them, but jewelers fear that unscrupulous dealers could scrape the inscription off.

Under Federal Trade Commission guidelines, a jeweler must disclose to consumers whether the diamond is fracture filled. And beginning this April, after much lobbying by jewelry industry watchdogs, the FTC is also requiring that jewelers disclose when a diamond is laser-drilled, Sperano said. There are no guidelines yet on the G.E. diamonds, which are being marketed, on a limited basis, under the name Bellataire diamonds.

Of course, consumers are free to ask about lasering now, and Solomon says that reputable jewelers will disclose it anyway. And the more forthcoming they are about educating the consumer, the better. "Most stores have brochures that will tell you about the 4 c's of diamonds," he said. "And we're happy to give it to you."