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FTC Updates Jewelry Guides

The Federal Trade Commission (“FTC”) has approved revisions to its Jewelry Guides. The FTC’s Jewelry Guides aim to help marketers in the jewelry industry avoid consumer deception, while simultaneously interpreting how Section 5 of the FTC Act applies to certain practices in the industry. Section 5 of the FTC Act declares unlawful any “unfair or deceptive practices in or affecting commerce.” The FTC has released other similar industry-specific reports and guidelines including, for example, reports and guidelines related to the clothing and textiles industry, finance industry, and tobacco industry. As the jewelry industry evolved, it became clear to the FTC that a revision of its Jewelry Guides was warranted. As such, these recent revisions seek to encompass and address new issues facing the industry.

The process of updating the Jewelry Guides started back in 2012 when the FTC, as part of its systematic review of existing rules and guides, sought public comment on the costs and benefits of the Jewelry Guides, and whether they should be repealed, amended or retained in their current form. In addition, the FTC sought comments on specific issues, including those concerning composite gemstones, pearls, diamonds, and precious metal alloys.

The FTC held a public roundtable in June 2013, and based on the comments and information generated from that roundtable, it proposed and sought public comment on revisions to the Guides in January 2016. In a move it says will help align the Guides with Section 5 of the FTC Act, the FTC has now approved certain revisions.

The revised Guides contemplate a range of issues pertinent specifically to the jewelry industry. For example, the Guides address surface application of precious metals (i.e. using the term gold or platinum to describe an entire product when the product has only been coated in that precious metal therefore the precious metal is only on the surface layer of the goods), composite gemstones, and use of the term “gem.”

As man-made diamonds continue to grow in popularity, the updated Guides also necessarily address how these products may be marketed without deceiving consumers into believing that the product was mined from the ground. Specifically, the Guides advise against describing these man-made diamonds as “cultured” without providing further qualification. The FTC cites a 2012 study where over half of the respondents thought a “cultured diamond” was a “natural product,” when the opposite is in fact true. Because mined diamonds are more expensive, the FTC found this confusion likely to deceive and cause harm to consumers. As always, the FTC reiterates in its updated Guides that all necessary qualifications and disclosures should be “clear, prominent, and understandable.”

The revised Guides also deleted some outdated or redundant provisions, and removed some unnecessary restrictions on product marketing.

TAKEAWAY: Jewelry marketers should thoroughly review the FTC’s updated Guides alongside their existing advertising policies and practices to determine compliance. The updated Guides provide specific guidance to marketers in the jewelry industry, and failure to comport with the Guides may result such marketers attracting unwanted attention from the FTC.

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