The Federal Trade Commission (“FTC”) recently approved final revisions to its Jewelry Guides (formally, the “Guides for the Jewelry, Precious Metals, and Pewter Industries,” the “Guides”), aimed at helping prevent deception in jewelry marketing. Based on the overall record of FTC review over the past six (6) years, the FTC has approved revisions to the Guides to better align the Guides with Section 5 of the FTC Act by: removing outdated or redundant provisions; guiding marketing of certain products to more accurately represent their properties; and removing existing restrictions on product marketing that are unnecessary to prevent deception.
Specifically, the FTC revised twelve (12) areas of the Guides as follows:
- Surface application of precious metals – First, the Guides caution marketers against using gold, silver or platinum terms to describe all or part of a coated product, unless they adequately qualify the term to indicate the product has only a surface layer of the advertised precious metal. Second, the Guides advise marketers advertising their product’s gold, silver or platinum coating to assure its reasonable durability. Third, the Guides provide revised examples of non-deceptive marking and descriptions for gold surface applications that are reasonably durable. Fourth, the Guides advise marketers to disclose the purity of coatings made with gold, silver or platinum alloy. Finally, the Guides advise marketers to disclose rhodium coatings over products advertised as precious metals.
- Alloys with precious metals in amounts below minimum thresholds – The Guides remove the thresholds for gold and silver alloys, advising marketers that they may use “gold” and “silver” to describe a product or part thereof composed throughout of gold or silver alloy if they qualify the term with an equally conspicuous, accurate karat fineness disclosure for gold alloys and/or an equally conspicuous, accurate part per thousand designation immediately preceding the silver term for silver alloys. The Guides retain the existing platinum alloy guidance without change.
- Products containing more than one precious metal – The Guides include a new section which states that it is unfair or deceptive to misrepresent the relative quantity of each precious metal in a product that contains more than one precious metal. The Guides advise marketers to list precious metals in the order of their relative weight in the product from greatest to least; however marketers may list metals in a different order if the context makes clear that the metal listed first is not predominant (e.g., “14K gold-accented silver”).
- Composite gemstone products – The Guides include new guidance for composite gemstone products, cautioning marketers not to use unqualified gemstone names to describe composite gemstone products and advising against calling such products “treated [gemstone name].” The Guides also caution against using the unqualified terms “composite [gemstone name],” “hybrid [gemstone name],” or “manufactured [gemstone name]” unless the term is qualified to clearly and conspicuously disclose that the product: (i) does not have the same characteristics as the named stone; and (ii) requires special care. The Guides further recommend the marketer to disclose the special care requirements to the customer.
- Varietals – The Guides include new guidance stating that it is unfair or deceptive to mark or describe a product with an incorrect varietal name.
- “Cultured” diamonds – The Guides include new guidance addressing the use of the word “cultured” to describe laboratory-created diamonds, advising marketers to qualify the word “cultured” by disclosing clearly and conspicuously that the product is not a mined stone. The Guides state that marketers can effectively qualify the term “cultured diamond” with the Guides suggested disclosures (“laboratory-created,” “laboratory-grown,” “[manufacturer name]-created”), however these qualifying disclosures need not be adjacent to the term “cultured,” provided they disclose clearly and conspicuously that the product is not a mined stone.
- Qualifying claims about man-made gemstones – The Guides advise marketers of man-made gemstones sharing the same optical, physical and chemical properties as the named stone that they may use terms other than the terms previously listed in the Guides (“laboratory-grown,” “laboratory-created,” “[manufacturer name]-created,” “synthetic”) to describe such man-made gemstone if such terms clearly and conspicuously convey that the product is not a mined stone.
- Pearl treatment disclosures – The Guides include a new guidance advising marketers to disclose clearly and conspicuously treatments to pearls and cultured pearls that: (i) are not permanent; (ii) create special care requirements; or (iii) significantly affect product value.
- Use of the term “gem” – The Guides eliminate two sections that discussed the use of the word “gem” because they are not necessary to prevent deception.
- Misleading illustrations – The Guides eliminate a section that discussed misleading illustrations because relevant guidance is provided in already addressed in other areas of the Guides.
- Diamond definition – The Guides eliminate the word “natural” from the definition of diamond because lab-created products that have essentially the same optical, physical and chemical properties as mined diamonds are also diamonds.
- Exemptions recognized in the assay for gold, silver and platinum – The Guides add bracelet and necklace snap tongues to the exempted items listed in the Appendix for gold alloy products and for products made of silver in combination with gold, as these items are already included in the exemption for mechanically-coated gold, silver and platinum products
Takeaway: Marketers should continue to clearly and conspicuously disclose the contents and processing of their jewelry products in accordance with the Guides, as applicable, and refer to the amended Guides when making certain products claims regarding content and quality.