July 27, 2018
The Federal Trade Commission (FTC) released the first significant update in 22 years to its Guides for the Jewelry, Precious Metals, and Pewter Industries on July 24, 2018. We’ve dissected the 46-page update and are highlighting the “big” changes within – from what defines a diamond to guidelines for composite gems.

The FTC Jewelry Guides stand as a critical reference tool for the jewelry industry, as they set standards for how to describe, disclose and market jewelry product and explain how to avoid making deceptive claims during the sales process. The updates come after more than six years of consultation with industry stakeholders -- including Jewelers of America, which participated in an industry coalition led by the Jewelers Vigilance Committee. The coalition gathered testimonials from jewelers and shared feedback with the FTC to attempt to guide and inform the changes.

Key Changes to the FTC Jewelry Guides


The FTC’s Definition of a Diamond, "Natural" No More


PREVIOUS VERSION: 
The previous FTC Jewelry Guides defined a diamond as “a natural mineral consisting essentially of pure carbon crystallized in the isometric system.”

WHAT CHANGED: The word “natural” has been removed from the definition of a diamond.
  • The new Guides state that “diamond” can refer to both a diamond that has been created by nature and mined by man as well as a lab-grown diamond that has the same “optical, physical and chemical properties as mined diamonds.”
  • The FTC still requires lab-grown producers to distinguish their product from mined diamonds, “clearly and conspicuously” conveying that the product is not a mined stone and recommending that any diamond that is created in a lab be described with a term such as: “laboratory-grown,” “laboratory-created” or “[manufacturer’s name]-created.”


“Cultured” Made the Cut to Describe Lab-Grown Diamonds


PREVIOUS VERSION:
The Jewelry Guides did not address the use of the term “cultured” to describe lab-grown diamonds.

WHAT CHANGED: The FTC now makes it permissible to use "cultured." However, the term must be “immediately accompanied, with equal conspicuousness” by one of the following terms: “laboratory-created,” “laboratory-grown,” “[manufacturer name]-created,” or by another word or phrase of like meaning.

 


“Synthetic” Is Out for Lab-Grown Diamonds


PREVIOUS VERSION:
The term "synthetic" was listed as an option to describe lab-grown diamonds.

WHAT CHANGED: The term “synthetic” is no longer among the recommended terms used to describe lab-grown stones. The FTC cited potential for consumer confusion as its reasoning.
  • The change does not strictly prohibit the use of “synthetic” but if marketers use the word to imply a competitor’s lab-grown diamond is not an actual diamond, it would be considered deceptive. 

 


Thresholds Removed for Gold & Silver


PREVIOUS VERSION:
 In the past, only jewelry product above 10K (for gold) and 925PPT (for silver) could be termed, "gold" and "sterling silver" respectively.

WHAT CHANGED: There are now no minimum thresholds to use the terms “gold” or “silver.”
  • With regard to gold, marketers of product below the 10K threshold are still required to disclose karat weight and only 24-karat gold can be described as simply “gold,” all others must be listed as 8K gold, 10K gold and so on.
  • For silver, a piece still has to be 925PPT to be called "sterling silver," anything below that must also include details of the fineness of the silver with the piece.

 


New Guidelines for "Composite" Gemstones


PREVIOUS VERSION: 
The Jewelry Guides were unclear on how to describe a gemstone as “composite” such as with lead-glass filled rubies.

WHAT CHANGED: FTC now warns against using unqualified gemstone names, like ruby, to describe gems made from composite materials. According to the FTC, this update is designed to address “increased prevalence of deceptive claims resulting from the marketing of composite gemstone products,” and it's a decision the gem industry has long sought. 
  • The Jewelry Guides advise against calling composite gems “treated [gemstone name].”
  • You may only use the phrases -- composite [gemstone name], hybrid [gemstone name], or manufactured [gemstone name] -- if you disclose “clearly and conspicuously” that the product does not have the same characteristics of the named stones and that they require special care.
  • The Guides recommend that the seller discloses special care requirements to the buyer.

 


Disclosure of Rhodium Plating

Rhodium plating must be disclosed to the consumer. The FTC now states that it is “unfair or deceptive to fail to disclose a surface-layer application of rhodium on products marked or described as precious metal.” This would include items such as “white gold.”
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