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FTC Proposes Revisions to Jewelry Guides

Wednesday, December 30, 2015
Sandler, Travis & Rosenberg Trade Report

The Federal Trade Commission is accepting through April 4, 2016, comments on proposed revisions to its Guides for the Jewelry, Precious Metals and Pewter Industries, which provide advice to businesses on how to avoid making deceptive claims about precious metal, pewter, diamond, gemstone and pearl products and when to provide certain types of disclosures about such products.

The proposed revisions concern surface application of precious metals, products containing more than one precious metal, alloys with precious metals in amounts below minimum thresholds, lead glass-filled stones, varietals, cultured diamonds, use of the term “gem,” and treatments to pearl products. Specifically, the FTC is proposing the following.

- The terms “silver” or “platinum” should not be used to describe all or part of a coated product unless the term is adequately qualified to indicate that the product has only a surface layer of the advertised precious metal.

- The safe harbors for surface applications of gold would be updated.

- Rhodium surface applications should be disclosed on products marked or described as precious metal, such as rhodium-plated items marketed as “white gold” or “silver.”

- Precious metals should generally be listed in the order of their relative weight from greatest to least.

- New guidance would be added concerning gold and silver products containing precious metal in amounts below the minimum thresholds currently specified when there is competent and reliable scientific evidence that such products have materially similar properties to at- or above-threshold products.

- It would be unfair or deceptive to describe products filled with a substantial quantity of lead glass with the unqualified word “ruby” or the name of any other precious or semi-precious stone; as a treated ruby or other treated precious or semi-precious stone; as a laboratory-grown, laboratory-created, (manufacturer name)-created or synthetic ruby or other natural stone; or as a composite ruby, manufactured ruby, hybrid ruby or other precious or semi-precious stone without qualification.

- It would be unfair or deceptive to mark or describe a product with an incorrect varietal name (which describes a division of gem species or genus based on color, type of optical phenomenon or other distinguishing characteristic of appearance).

- It would not be unfair or deceptive to use the term “cultured” to describe lab-created diamonds if the term is immediately accompanied by “laboratory-created,” “laboratory-grown,” “(manufacturer name)-created,” “synthetic” or another word of phrase of like meaning.

- The section on misuse of the term “gem” would be eliminated and the term “gem” would be added to a separate section on misuse of specific words.

- Treatments to pearls and cultured pearls should be disclosed if the treatment is not permanent, creates special care requirements or has a significant effect on the product’s value.

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