US-based Federal Trade Commission (FTC) has issued its revised Jewelry Guides aimed at promoting transparency and proper disclosure in the jewellery sector to prevent unfair trade practices. Industry players however expressed concern over revisions that could potentially sow further confusion among consumers.
The guides explain to businesses how to avoid making deceptive claims about precious metal, pewter, diamond, gemstone and pearl products, and when they should make disclosures.
Pertinent changes were made to the guidelines for diamonds, specifically which terms can be used to describe man-made diamonds. Previously, the terms “laboratory-grown,” “laboratory-created,” “[manufacturer name]-created,” or “synthetic” were approved descriptors for non-mined diamonds.
Under the revised guides, the first three are still recommended for use but the word synthetic has been removed from the descriptor list.
The guides also advised marketers of man-made diamonds – products that share the same optical, physical and chemical properties as mined diamonds – that they may use “words or phrases other than the ones listed in the previous guides” provided that they clearly state the product is not a mined stone.
FTC likewise approved the use of the term “cultured” to describe a laboratory-grown diamond as long as it is accompanied by qualifiers or accepted labels, or “other word or phrase of like meaning.”
The revised guides also removed the word “natural” from the basic definition of diamond since there is now more than one way to create a diamond. This however does not affect the requirement to describe a laboratory-grown diamond using official descriptors.
According to the World Federation of Diamond Bourses (WFDB), the new guidelines are not in line with the Diamond Terminology Guidelines agreed upon last year and implemented by the WFDB, the International Diamond Council, the International Diamond Manufacturers Association and CIBJO, the World Jewellery Confederation.
WFDB President Ernie Blom commented, “We have a united stand regarding nomenclature which was agreed with all the combined knowledge and experience of the leading industry bodies, but the FTC appears to have moved in a different direction.”
Changes, specifically striking down the word synthetic as a diamond descriptor, “provide too much of a bias towards the lab-grown diamond sector,” added Blom. “Our paramount aim is always consumer confidence and the revision has the potential to cause a degree of confusion.”
The WFDB official however commended the FTC for emphasising that any descriptors for non-mined diamonds must be clear and prominently displayed to consumers and that a diamond sold without any descriptors must be a natural diamond.
“We hope that the door is still open for us to go back and approach the FTC in order to try and persuade the organisation to re-think its decision,” Blom added.
The Diamond Producers Association (DPA), while praising some FTC revisions, also said it is deeply concerned about the guides “failing to provide the clarity required to avoid more consumer confusion and deception, instead introducing unnecessary ambiguity.”
The association cited FTC’s go signal for the qualified use of the term “cultured diamonds” even though it has been demonstrated that the majority of consumers mistakenly interpret “cultured” as a description used for natural diamonds. “The DPA believes that this principle, if widely applied, would open the door to yet more consumer confusion and deception,” it continued.
RA Riam Group’s ALTR Created Diamonds meanwhile lauded FTC’s decision to eliminate the word “natural” from the diamond definition.
The revised guides stipulate, "When the FTC first used this definition in 1956, there was only one type of diamond product on the market — natural stones mined from the earth. Since then, technological advances have made it possible to create diamonds in a laboratory. These stones have essentially the same optical, physical, and chemical properties as mined diamonds. Thus, they are diamonds."