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Consumer watchdog warns lab-grown diamond firms against misleading marketing

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American consumer watchdog, the Federal Trade Commission, has sent letters to eight jewellery firms, warning them that some of their online advertisement for products adorned with lab-grown diamonds or diamond simulants may be deceiving customers.

The FTC did not specify which companies had been contacted, but revealed it cautioned eight jewellery marketers not to use the name of any precious stone, including diamonds, to describe a lab-created stone or diamond simulant, unless the word is immediately proceeded by a clear and conspicuous disclosure that the product does not come from a mine.

The FTC says under its jewellery guides, representations for non-mined diamonds must be clear.

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The letters note that in July 2018, the FTC issued updated Guides for the Jewellery, Precious Metals, and Pewter Industries that provide marketers with information on how to make non-deceptive representations about jewellery and related products, including mined, lab-created, and simulated diamonds.

Failure to follow the Guides, the FTC warns, may result in enforcement actions if it is determined the companies have engaged in unfair or deceptive acts or practices.

Such actions could result in civil penalties if the company engaged in practices knowing that the FTC has already deemed them deceptive in earlier litigation.

The FTC shares: “In the letters, the staff expresses concerns that some of the companies’ advertising fails to conform to the current version of the Guides, and may therefore deceive consumers. Specifically, the staff points out examples where the advertising might imply that a simulated diamond is a lab-created or mined diamond, or that a lab-created diamond is a mined diamond, or where required disclosures about the source of the diamonds are not proximate to the individual product descriptions.”

Several letters also noted that some of the companies have advertised their jewellery as “eco-friendly” or “sustainable”, and that such terms can be interpreted to imply certain specific environmental benefits.

It remarks: “Sellers must have a reasonable basis for making such claims for any products and the claims should be adequately qualified to avoid deception. The letters admonish the companies not to use unqualified claims such as ‘eco-friendly’, ‘eco-conscious’, or ‘sustainable’, as it is highly unlikely that they can substantiate all reasonable interpretations of these claims.”

Finally, in each letter, the FTC asks the companies to advise them within 10 days within receipt of steps they plan to take to revise their marketing so that it follows the Jewellery Guides and therefore complies with the FTC Act.

RELATED STORY: The UK has stricter adviser about the use of terminology when marketing lab-grown diamonds. Read the NAJ’s views on the FTC’s guidelines HERE.

Tags : DiamondsFTClab grown diamondsmarketing
Stacey Hailes

The author Stacey Hailes

Editor, Professional Jeweller

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