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RAPAPORT TRADE ALERT – July 27, 2018
New US Federal Trade Commission Guidelines Still Require Full Disclosure for Synthetic Diamonds
Jul 29, 2018 5:27 AM
By Martin Rapaport
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RAPAPORT... The United States Federal Trade Commission (FTC) has issued
new Guides for the Jewelry Industry. While these guidelines create confusion by
expanding the definition of the word ‘diamond’ to include synthetic diamonds
they continue to restrict the use of the word “diamond’ to natural diamonds
unless the word is immediately preceded by a word or phrase that clearly
discloses the product is not a mined diamond.
All synthetic
diamonds and colored stones must be clearly disclosed. The word diamond cannot
be used for synthetic diamonds without words immediately preceding indicating
it is not a natural diamond. The word diamond alone without a qualifier can
only be used for natural diamonds.
Please note that the following selections from the new FTC
guides apply to diamonds.
§ 23.25 (a) “It is unfair or deceptive to use the
unqualified words ‘‘ruby,’’ ‘‘sapphire,’’ ‘‘emerald,’’ ‘‘topaz,’’ or the name
of any other precious or
semi-precious stone to describe any product that is not in fact a mined
stone of the type described.”
(b) It is unfair or deceptive to use the word ‘‘ruby,’’
‘‘sapphire,’’ ‘‘emerald,’’ ‘‘topaz,’’ or the name of any other precious or semi-precious stone,
or the word ‘‘stone,’’ ‘‘birthstone,’’ “gem,” ‘‘gemstone,’’ or similar term to
describe a laboratory-grown, laboratory created, [manufacturer name]-created,
synthetic, imitation, or simulated stone, unless such word or name is
immediately preceded with equal conspicuousness by the word
‘‘laboratory-grown,’’ ‘‘laboratory-created,’’ ‘‘[manufacturer name]-created,’’
or some other word or phrase of like meaning, or by the word ‘‘imitation’’ or
‘‘simulated,” so as to disclose clearly the nature of the product and the fact
it is not a mined gemstone.
§ 23.27 “Misuse of the words ‘‘real,’’ ‘‘genuine,’’
‘‘natural,” ‘‘precious,’’ etc. It is unfair or deceptive to use the word
‘‘real,’’ ‘‘genuine,’’ ‘‘natural,’’ ‘‘precious,’’ ‘‘semi-precious,’’ or similar
terms to describe any industry product that is manufactured or produced
artificially.”
The Rapaport Group believes that the current FTC guidelines
should be modified. They have created confusion and misunderstanding as they
redefine the word “diamond” to include synthetic, man-made, non-natural, artificial,
imitation diamonds that have “essentially the same optical, physical, and
chemical properties as mined diamonds.” The FTC guides ignore natural as a
definition of diamond, focusing on physical properties instead of scarcity and
value differentiation which are key factors in product definition and vital for
consumer protection.
We will be communicating a series of questions and requests for
modifications to the Guides in the future. The full text of the new FTC Guides
with the FTC Statement of Basis and Purpose is available here:
We invite your comments to Martin@Diamonds.net. The FTC may also be contacted
directly:
Reeneh L. Kim, Attorney +1-202—326-2727, Division of
Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600
Pennsylvania Ave. NW, Washington, DC 20580
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Tags:
federal trade commission, ftc, FTC Statement of Basis and Purpose, Guides for the Jewelry Industry, Martin Rapaport, Rapaport News, Synthetic diamonds
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