Jewellers' Network

Reviewing the Federal Trade Commission (FTC) jewellery guides

BY CRAIG THOMAS

With the Federal Trade Commission (FTC) having recently made several revisions to its jewellery guides, let us take this opportunity to have a look at the most relevant changes.

The FTC’s main objective is to protect the interests of the consumer and prevent anti-competitive practices. They do not pass legislation but rather set guidelines for industry and enforce existing laws. Relevant examples of these guidelines would be;

  • “Composite” gemstones may not be marketed under an unqualified gemstone name like ruby without qualifying it, eg. lead glass-filled ruby. The description should also specify that the stone requires special care.
  • The thresholds for calling an alloy gold or silver have been eliminated. From now on gold under 10k may be called gold if the karat fineness is clearly stated. Alloys of silver less than 925 can be called silver if immediately preceded by a clear and accurate parts per thousand reading.
  • The rules for describing metal coatings advise against using terms like silver or platinum unless it specifies that it is talking about a coating.
  • The guides now prohibit the use of incorrect varietal names. They have specifically called out yellow emerald and green amethyst.
  • The FTC now requires disclosure of pearl treatments to both pearls and cultured pearls.
  • The FTC gave further leeway to the existing standards regarding the description of laboratory grown diamonds.
    The new guides recommend the following descriptors, Laboratory-created, Laboratory-grown and (Manufacturer-name)-created. The FTC no longer recommends synthetic as a modifier. The FTC said that manufacturers can use other phrases if those terms “clearly and conspicuously convey that the product is not a mined stone.” The commission also settled a long-running industry debate, ruling in favour of the lab-grown sector and allowing the term cultured to be used when describing a created stone. The FTC still recommends against using the term cultured on its own. The overall marketing needs to “clearly and conspicuously convey that the product is not a mined stone.” Diamond growers had sought to prohibit use of the word synthetic, arguing that consumers equate it with simulants such as cubic zirconia. While the FTC has taken synthetic off its suggested list of descriptors, it has declined to prohibit its use outright since the term is commonly used by gemmologists and scientists.
  • Finally the FTC stated that the same rules that apply to man-made diamonds should apply to man-made coloured stones.

Overall the revised guides are going to protect consumers and the trade. The only concerns are the changes to the definition of a diamond and the increased wiggle room that they gave the laboratory grown sector with regards describing their product. There are many manufacturers that have written articles since the guides revision and it is scary to read. The one manufacturer was advocating the use of cultured diamond as an adequate description for his product and drew a parallel to the way cultured pearls are often just referred to as pearls. He claimed that lab grown diamonds were headed in the same direction.  With synthetic stones finding their way into parcels of melee and larger stones being passed on as natural with no disclosure of synthetic origin, this is going to be a challenging time for all in the jewellery trade.


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