From Conclave: FTC Do’s and Don’ts Beyond Lab-Grown Diamonds

New York—When the Federal Trade Commission debuted the revised Jewelry Guides in July, the new regulations around lab-grown diamonds were the talk of the industry.

The recent warning letters sent to eight companies regarding their advertisements for lab-grown diamond jewelry and diamond simulants have reignited the discussion, but there are other changes to the guides that warrant attention.

Jewelers Vigilance Committee CEO Tiffany Stevens and Senior Counsel Sara Yood held a session Wednesday at AGS Conclave in Seattle to break down all the changes to the Jewelry Guides.

“We just want to make sure everyone knows what their responsibilities are,” Stevens said.

She noted that while the guidelines are not technically laws, not adhering to them could lead to lawsuits from the FTC or competitors, or even class-action lawsuits from consumers.

Here a few tips and tricks to keep jewelers in compliance.

Be Upfront With Plating

Under the new guidelines, jewelers are required to disclose if a piece of jewelry has been plated with rhodium, platinum or silver. When using rhodium plating, the seller has to assure the durability of the coating.

Yood recommended applying the “reasonable person standard”—meaning the plating will last as long as your average customer would expect—and always disclosing plating to the customer in writing.

Be Mindful of Metal Minimums

There is no longer a 10-karat minimum threshold for gold, meaning 8-karat or below can be labeled gold in the United States.

However, the fineness needs to be disclosed for anything under 24-karat gold.

While there is no minimum threshold for silver, the fineness must be disclosed and a piece must be at least .925 ppt silver to be called “sterling” silver.

If a piece contains more than one precious metal, the predominant metal should be listed first in the description or described in a way that makes it clear.

For example, if a necklace is mostly silver with 14-karat gold accents, the JVC’s presentation suggested describing it as “sterling +14K” or “14-karat gold accented sterling silver.”

Disclose All Pearl Treatments

While not mentioned in previous editions, there is a section in the revised Jewelry Guides about pearl treatments.

A pearl treatment has to be disclosed if the treatment is not permanent, requires special care or significantly affects the value of the pearl, such as dyeing.

The guidelines also recommend explaining any special care requirements a customer would need to know.

Be Clear About Composite Gemstone Products

Disclosure is important when describing products made with gemstone material and filler,  such as glass or a polymer. 

Stay away from calling these products “lab-created” or “lab-grown,” or referring to them as “treated” gemstones.

Instead, call it a composite gemstone, hybrid gemstone or a manufactured gemstone.

For example, a seller could describe a lead-glass filled ruby as “composite ruby, lead-glass filled, special care required.”

Also, be careful not to get too creative with varietal naming, the JVC warned in its presentation. It would be considered deceptive to describe golden beryl as a “yellow emerald” or prasiolite as “green amethyst.”

Handmade Products Must Be Made Entirely By Hand

While this might seem obvious, the guides are specific about what it means to say a product is “handmade.”

If a jewelry designer uses CAD software to create a piece, then that’s not considered handmade.

In order to say a product is handmade, the “entire shaping and forming of such product from raw materials and its finishing and decoration were accomplished by hand labor,” the FTC Jewelry Guides state.

If a seller wants to tout something special about a piece that was partially handmade, boast about the specific part of the process that was done manually, such as hand-set or hand-engraved, advised Yood.

A Hashtag Is Not Disclosure

Social media is an indispensable advertising tool for most companies, but sellers need to be mindful of their descriptions on platforms like Facebook and Instagram.

It might be helpful to look back on old social media posts as well to be sure they’re all up to standard, Yood said.

Definitely share that gorgeous ring photo, she said, but understand that “#LabGrownDiamond” is not sufficient disclosure. Give as much detail about the piece as possible.

Eco-Friendly Claims Must Be Backed Up

The recent FTC warning letters mentioned that companies can’t play fast and loose with calling themselves “eco-friendly.” It’s not a throwaway term and needs to be backed up with data, advised JVC.

The FTC has an entirely separate set of guidelines for environmental claims, the “Green Guides.” They apply to all advertising, and the jewelry industry is no exception.

Jewelers with additional questions or concerns about the revised guidelines can visit the JVC’s website for more information about compliance.