a publication of the International School of Gemology 15 February 2013

Top Ten Myths of the Jewelry Industry

Editorial from Robert James and the ISG

Over the past few months we have received ongoing questions from potential students and consumers regarding what has become a recognized list of misconceptions about the jewelry industry. These are based on what must be considered some very creative marketing by some members of the industry, and outright misrepresentation by others. For the benefit of those considering joining this industry or becoming a consumer of this industry’s products, we offer the Top Ten Myths of the Jewelry Industry.

Myth #1: The title of Graduate Gemologist is a formal license in gemology with legal standing in the industry.

Truth: The title of GIA Graduate Gemologist is a trademark, a trade name owned by the Gemological Institute of America. It is not based on any formal industry standard, does not bestow or grant any legal standing to the title holder and is not based on any legally established foundation of the industry. It is a trade name like Pepsi Cola or Ford Motor Company.

Myth #2: GIA Graduate Gemologists are qualified as jewelry appraisers.
Truth: GIA Graduate Gemologists are trained gemologists. The GIA does not teach jewelry appraisal and title holders of the GIA GG have not been formally trained in appraisal based solely on the GIA diploma. Additional training from the National Association of Jewelry Appraisers, the AIS, ASA, ISA or ISG RGA or other programs must be obtained in addition to the GIA training to properly train one as an appraiser. However, please see the next entry…..

Myth #3: A license is required for one to do jewelry appraisals.

Truth: There is no legal requirement for anyone doing jewelry appraisals to have any formal training, there is no legal requirement for licensing and there is no oversight entity that oversees the jewelry appraisal profession. Anyone with a letterhead and a loupe can legally hold themselves out as jewelry appraisers. While someone cutting fingernails for a living is required to be trained and licensed (including continuing education) the jewelry appraisal profession is totally unregulated.

Myth #4: The GIA is the “official” gemology school of the industry.

Truth: The GIA is neither the “official” gemology school of the industry, nor do they hold any legal standing as the “authority” of gemology schools, as many have been made to believe by the public relations department of the GIA. The concept of the GIA as the “foremost authority” is once again a paid trademark of the GIA and not an industry bestowed legal standing. And there is no “official” school of gemology in the industry since there are no uniform standards and no oversight body to bestow any title on any gemology school. There is simply no “official” gemology school anywhere in the world, and no accepted “authority” regarding gemology.

It should also be noted that many international GIA offices are not owned and operated by the GIA, but are actually licensed franchises much like a Burger King® or Whataburger®.

Myth #5: Other gemology schools must be recognized by the GIA in order to be considered accredited within the industry.

Truth: Asking another gemology school if they are recognized by the GIA is like asking Coca Cola if they are recognized by Pepsi Cola. Or, before buying a Ford F-150 pickup, you ask Ford if they have been recognized by General Motors. The GIA is simply a non-profit school set up by the American Gem Society. They have no legal standing to recognize or approve anyone else in the industry, any more than Apple Computer has the authority to recognize or approve Dell Computers before Dell can sell computers.

Myth #6: The American Gem Trade Association enforces gemstone treatment disclosure rules among its members.

Truth: The AGTA does not enforce the rules of disclosure of gemstone treatments. The organization was started by a group of dealers 30 years ago with the intent of establishing an organization that would provide proper disclosure of treatments to consumers and the industry. But it is a widely known issue that the AGTA does not actively enforce these disclosure rules in spite of having an excellent set of rules in place. The case of AGTA member Andegem and their Tibet andesine is a classic and well documented case in point.

Myth #7: Gem lab certificates will protect you in court if you sell a gemstone that has been misrepresented and you have a certificate that backs you up.

Truth: Gem lab reports are considered hearsay evidence and are not allowed in court, based on actual court documents and rulings. This is due to the labs refusing to take responsibility for errors, and refusing to make available the people who performed the report for legal depositions and court proceedings. In the case that misrepresentation is found in a sale, the dealer making the sale holds the final responsibility for the representations made. Lab reports from outside one’s own country are without legal standing, and those from inside the country are only good if the lab will accept all responsibility for the report and appear in court to defend the certificate. To date, there are no labs in the industry who have expressly stated that they will stand behind their certificates in a court of law.

Myth #8: Gemological Labs have uniform standards.

Truth: There are no uniform standards in the gemological lab industry by any lab. Not the GIA GTC, the EGL, AGSL, GRS Swisslab or any other lab. All gemological labs operate under their own set of rules and standards, and are not held to any uniform standards or oversight body regarding any procedures. There are no uniform standards in the gemological lab industry, and no oversight body to administer standards if they did exist. The Lab Manual Harmonization Committee is a prime example of "Gem Labs Gone Wild", (to borrow a phrase from "Girls Gone Wild®".)

Myth #9: Television shopping channels and internet sellers are governed by the FCC or other government entity regarding claims made on-air by their OAP (on air personality) who sell.

Truth: As demonstrated by the recent litigation of Direct Shopping Network –v- Robert James, Colored Stone Magazine, et al….there is no government oversight regarding claims made by television shopping networks or internet sellers regarding claims made by these sellers. Since the industry has no formal uniform standards and no oversight body, the government bodies such as the FTC have failed to take the helm of this issue and no oversight cases have been made on record as of this date regarding the sales techniques and claims made by the television shopping channels. The only action on record for internet sellers has come in the form of civil lawsuits to close internet sites such as the recent Tiffany and Company action against several Chinese websites selling fake Tiffany and Company wares.

Myth #10: Class action lawsuits are a good way for consumers to get compensation against sellers who misrepresent their jewelry or gemstone products.

Truth: As demonstrated by the recent cases of consumers and the Tibet andesine fiasco, class actions do not directly benefit the class members; those consumers harmed by the illicit actions. Indeed, the only ones who truly profit from a class action lawsuit is the class action lawyers who bring the suits and gain large legal cost settlements as part of the class settlement. For the most part consumers get a disclaimer saying the defendant is paying the settlement but admits no guilt, and they then get a paltry sum that rarely, if ever, actually covers their losses. And yet the class action attorneys get large legal payments for their work.

It is a fact, that the class action lawyers in the Jewelry Television Tibet andesine class action visited the office of the ISG seeking advice regarding what other deep pocket entity in the jewelry or gemstone industry might be a target for another class action. When we could not (read: would not) provide other targets for class actions in the jewelry industry, these attorneys were never heard from again.

Class actions serve no purpose other than lining the pockets of the class action law firms who seek out deep pocket defendants from whom large legal fees can be forced.

We should note that during our Direct Shopping Network –v- Robert James litigation, we had the opportunity to work with some of the finest professional lawyers and legal teams in the country. These professional lawyers are considered by this office to be the apex of the legal profession. These professionals hold high the standards of legal jurisprudence in this country. They should not be considered among the class action seeking law firms who are considered by this office to be the nadir….the bottom feeders….the momsers of the legal profession.

I hope this clarifies these myths about the jewelry and gemology industry as seen from the ISG office. We welcome your comments and responses, and look forward to hearing from you on these and other issues that affect this industry.

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