Background

Effective Aug. 16, the Federal Trade Commission is revising 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 revisions concern surface application of precious metals, products containing more than one precious metal, alloys with precious metals in amounts below minimum thresholds, composite gemstone products, varietals, cultured diamonds, qualifying claims about manmade gemstones, pearl treatment disclosures, use of the term “gem,” misleading illustrations, definition of diamond, and exemptions recognized in the assay for gold, silver, and platinum.

Highlights of the revisions include the following.

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

- Marketers should disclose the purity of coatings made with a gold, silver, or platinum alloy.

- Rhodium surface applications should be disclosed on products advertised 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 addresses the increased prevalence of deceptive claims resulting from the marketing of composite gemstone products made with gemstone material and any amount of filler or binder, such as lead glass.

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

- A “cultured diamond” claim may be qualified with words or phrases similar to those detailed in the Guides (e.g., “laboratory-created,” “laboratory-grown,” or “(manufacturer name)-created”) even when they do not appear immediately adjacent to the word “cultured,” provided it discloses clearly and conspicuously that the product is not a mined stone.

- Treatments to pearls and cultured pearls should be disclosed if the treatment is not permanent, creates special care requirements, or significantly affects value.

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