Editors

A Quick Review of the FTC’s Rules on Lab-Grown Diamonds

EditorsApr 05, 2019

A Quick Review of the FTC’s Rules on Lab-Grown Diamonds

Our Editor-in-Chief Michelle Graff offers a refresher following the Federal Trade Commission’s distribution of eight warning letters regarding advertisements for lab-grown diamond jewelry or diamond simulants.

20190405_FTC_logo_header.jpg
Earlier this week, news broke that the FTC had sent letters to eight companies warning them that their advertisements for lab-grown diamond jewelry or diamond simulants (CZ, moissanite, etc.) could be deceptive.

The distribution of these letters comes less than a year after the commission’s long-awaited overhaul of the Jewelry Guides, the FTC-created rulebook that outlines the terms marketers should, and shouldn’t, use to describe jewelry to consumers.

When the new Jewelry Guides dropped last summer, it seemed, to me anyway, that many lab-grown diamond companies perceived the revisions to be a big victory for them, perhaps bigger than it actually was. They’ve since gone a little overboard with their marketing, either thinking that it was allowed or that nobody was watching or would notice.

But that, apparently, is not the case.

The FTC is paying attention and is interpreting the revised guides more strictly than some had expected, including Jewelers Vigilance Committee President and CEO Tiffany Stevens, whose organization is tasked with (among many other things) keeping the industry’s advertising in check.

Stevens told me in an email Thursday that, “We are extremely encouraged that the FTC is putting focus on our industry in this way at this time. The guides had not been updated since the ‘90s, and in our conversations with the FTC, we emphasized that the update really wasn’t complete until they took some enforcement action to demonstrate the meaning and limits of the new guides.

“We were seeing evidence of some players really creating their own reality and running wild beyond any reasonable interpretation of the new guides. We would reach out to stem the action and also see incidents in our mediation practice, but there is nothing like having such a loud and clear action from the federal government itself.”

All this being said, I thought in light of this week’s events, now would be a good time for a refresher on the FTC’s Jewelry Guides as they pertain to man-made diamonds and simulants.

1. If a product is a lab-grown diamond, then the fact that it is man-made must be clearly and conspicuously stated.

When the FTC released its revised Jewelry Guides in July 2018, much was made about the removal of the word “natural” from the definition of a diamond. Too much, in my opinion.

The FTC made the change to the definition of a diamond in its Jewelry Guides before the section on diamonds as a way of saying: We will lay out the guidelines in this coming section that apply to diamonds, and by diamonds we mean “a mineral consisting essentially of pure carbon crystallized in the isometric system” that was either mined from the earth or grown in a factory. 


Nothing changed about how lab-grown diamond companies, and sellers of lab-grown diamonds, have to describe the product to consumers.

The FTC says they still must make it clear that the product is man-made by using “clear and conspicuous” disclosure with the word diamond; the three terms the FTC recommends using are laboratory-grown, laboratory-created or [manufacturer name]-created.

Cultured is OK too, but it has to be “immediately accompanied, with equal conspicuousness” by one of the three terms; it cannot stand alone.

When “diamond” appears by itself, it still means a natural diamond.

And those three qualifying terms mentioned above, the FTC noted this week, must be “proximate” to the product description, not in a place where consumers aren’t likely to see them. It mirrors the rules the commission has laid out for paid posts by influencers, who are supposed to write “#ad” where people can see it, not bury it in the middle of a caption.

Companies cannot relegate disclosures to FAQ or education pages, with FTC Consumer Education Specialist Bridget Small noting in a blog published on FTC.gov Tuesday: “Some businesses only put information about how a stone was really made on a ‘diamond education’ webpage, rather than in or near an ad where shoppers were more likely to see it.”

2. Social media is a not a free-for-all. 

A lot of the advertising the FTC found to be problematic was spotted on social media, said Robert Frisby, an attorney with the commission who spoke to National Jeweler Thursday as an FTC staff member, not on behalf of the commission.

The FTC reminded companies that the Jewelry Guides and the truth-in-advertising provisions of the FTC Act apply on Instagram, Facebook and Twitter, too.

Frisby also urged marketers to be cautious when using hashtags, for two reasons.

First, if a marketer wants to use a hashtag for disclosure purposes—e.g., #labgrown—they have to consider the overall impression of the advertisement. Is that hashtag making it obvious enough to consumers what the product is?

Secondly, marketers need to be mindful of making claims with hashtags. For example, #diamonds might imply that a product is mined, since the FTC still considers “diamond” alone as referencing a mined diamond.

3. CZ and moissanite aren’t the same thing as diamond (either natural or man-made), and that must be clear too.

In addition to the ads for lab-grown diamonds, the FTC noted that it spotted advertising for simulated diamonds that implied the stone was either a lab-grown or mined diamond.

The commission “encourages” companies selling simulated diamonds to avoid describing their products in a way that “falsely implies” what they are selling has the same optical, physical and chemical properties as mined or lab-grown diamonds.

4. Be cautious when making “eco” claims. 

Several of the letters the FTC sent to allegedly offending companies noted that many businesses are advertising their jewelry as “eco-friendly,” “eco-conscious” or “sustainable.” The FTC advises against making such “unqualified” claims, meaning using the words without explaining exactly what they mean. 

“Some of the letter recipients, in our view, were not qualifying them adequately,” said Frisby.

For example, if a company is claiming its product is “eco-friendly” because it’s recyclable, or because it takes measures to use less energy or less water in the manufacturing process, then the ad has to state this. It can’t just state “eco-friendly” because there are too many ways consumers can interpret that.

In addition, companies need to have publicly available evidence backing up their claims, and the amount of scientific evidence that’s needed increases with certain claims, such as “carbon neutral.”

The FTC has an entire rulebook dedicated to “eco” claims, separate and apart from the Jewelry Guides. It is called the “Green Guides” and can be accessed on FTC.gov.

The JVC’s Stevens added a point I’ve made in writing about lab-grown diamonds on this blog before: a product cannot be labeled as “green” or “eco-friendly” simply because it is perceived to be “greener” than the same product next to it.

She explained it like this: “One of the recurring issues we see with the environmental claims is the use of relative standards (i.e., Michelle speaks 20 words of Spanish and Tiffany speaks one so Michelle is fluent in Spanish) rather than what the standard actually is under the [FTC’s] Green Guides, which is an absolute (i.e., Michelle is either fluent in Spanish or not, regardless of how competent the person standing next to her is.)”

Before I wrap up this blog, it’s worth noting that the FTC is not a law enforcement body; no one is going to prison for putting out diamond jewelry ads that violate the FTC’s Jewelry Guides.

However, the commission can levy fines, and, what might even be worse for these companies, the commission publicizes when it writes warning letters, which can result in coverage not just from trade press but consumer press as well.

Reuters picked up the story about the FTC’s warning letters, as did Ad Age.

The story even made it onto Page Six of the New York Post, which ran it with the headline, “Leonardo DiCaprio-backed diamond company accused of false advertising,” zeroing in on the Diamond Foundry. 

The FTC is not disclosing the names of the seven other companies that received warning letters without a Freedom of Information Act request. 

A spokeswoman for the Diamond Foundry said the company is limited as to what it can say at this point, but released the following statement: “We have received an inquiry from the FTC, which we take seriously and will respond to in comprehensive detail. We pride ourselves on being a lab-grown diamond producer, and this point of differentiation is what our success is built on. We have worked collaboratively with the FTC for years, and the FTC has been a great supporter of the industry and a champion of change for consumer transparency.”

The FTC is giving the companies it contacted 10 days to let the commission know how they plan to alter their advertising. 

The Diamond Foundry said it will share follow-up information when available. 

Stay tuned. I bet this isn’t the last we’ll hear from the FTC regarding the revised Jewelry Guides.

Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

The Latest

Pantone color of the year 2024
TrendsDec 08, 2023
Pantone’s Color of the Year Is Warm and Fuzzy

The peachy hue also marks the program’s 25th anniversary.

Mary Tyler Moore and Elsa Peretti for Tiffany & Co. Bone Cuffs
AuctionsDec 08, 2023
Sotheby’s Sold All Mary Tyler Moore’s Jewelry

The 21 pieces up for auction, including Tiffany & Co. jewels and a Cartier watch, garnered more than $430,000 across two sales.

Inesa Kovalova’s Links pin
CollectionsDec 08, 2023
Piece of the Week: A ‘Strong & Precious’ Brooch

Centered on a sunny heliodor, the “Links” pin was designed by Ukrainian jewelry artist Inesa Kovalova.

De Beers | Diamonds Falling
Brought to you by
The Most Important “C” in Diamonds: Confidence!

Without the ability to instill confidence within the industry and directly to the consumer, a diamond holds very little value.

Lashbrook ring
MajorsDec 07, 2023
Lashbrook Sues Manly Bands for Allegedly Copying Designs

The wedding band company is also accusing its former customer of removing watermarks from Lashbrook images for its own use.

Weekly QuizDec 07, 2023
This Week’s Quiz
Test your jewelry news knowledge with this short test.
Take the Quiz
Rough diamonds from Alrosa
Policies & IssuesDec 07, 2023
The G7’s Long-Awaited Statement on Russian Diamonds Is Here

It provides a timeline for the implementation of new restrictions, but no details.

24 Karat Club of New York new members
MajorsDec 07, 2023
24 Karat Club of New York Welcomes New Members

The organization has elected 12 new additions.

Platinum  Guild International Diamond Rings
Brought to you by
If It’s Custom, Make It Platinum

With holiday proposals right around the corner, encourage your customers to go for platinum when making the big purchase.

National Jeweler columnist Sherry Smith
ColumnistsDec 06, 2023
On Data: How Are Independents Doing So Far This Holiday Season?

Sherry Smith breaks down the numbers on jewelry sales in November and reveals the category that “emerged as a standout.”

133 carat yellow diamond
AuctionsDec 06, 2023
A Yellow Diamond, Hollywood Jewels Stand Out at Sotheby’s

Additional lots will be offered in the Fine Jewels online sale through Dec. 7.

GIA logo
GradingDec 06, 2023
GIA Debuts Revamped Graduate Jeweler Program

By mixing creative and practical skills, the new course hopes to fill the industry’s bench jeweler gap.

A 1930s gem-set and enamel ‘Maltese cross’ cuff attributed to Verdura for Chanel (left) and a loose cushion-cut Burmese sapphire weighing 11.87 carats (right) were the top lots in Bonhams New York Jewels auction this week.
AuctionsDec 06, 2023
Verdura Cuff, Burmese Sapphire Shine at Bonhams

Several other colored gemstones joined the pieces in the top 10 list.

Neil Lane lab-grown diamond engagement ring
FinancialsDec 05, 2023
Signet Jewelers’ Q3 Sales Down 12%

The retailer is still expecting a strong holiday season with improving demand for natural diamonds.

Memorial for slain jeweler Peter Damian Arguello in Wheat Ridge, Colorado
CrimeDec 05, 2023
Police Continue to Investigate Murder of Colorado Jeweler

Peter Damian Arguello, the owner of Peter Damian Fine Jewelry & Antiques, was shot and killed in an apparent robbery last week.

Tanishq store
MajorsDec 05, 2023
Tanishq Continues U.S. Expansion With 2 New Stores

The Indian jewelry giant has opened locations in Houston and Frisco, Texas.

Grandview Klein Diamonds Namibia scholarship winners
SourcingDec 05, 2023
Grandview Klein Awards Two Scholarships in Namibia

Each student was provided with the full amount of tuition for the Namibia University of Science & Technology.

De Beers Ryan Perry and David Prager
SourcingDec 04, 2023
David Prager To Leave De Beers in 2024

Ryan Perry, who has been with De Beers since 2002, also will be leaving the company next year.

Chrono24 ChronoPulse
WatchesDec 04, 2023
Chrono24 Debuts the ‘Dow Jones’ for Luxury Watches

The watch seller’s new index tracks sales data from 14 brands, including Rolex and Patek Philippe.

David Bouffard Signet Jewelers
MajorsDec 04, 2023
David Bouffard to Leave Signet, RJC

The industry veteran will step down from both roles in April 2024.

David Webb turquoise and lapis ring
TrendsDec 04, 2023
Amanda’s Style File: Decadent December

Tanzanite, turquoise, and zircon are all options for December babies, who sometimes “get the birthday shaft,” Amanda Gizzi writes.

Lightbox x Roséate Light Wand pendants
Lab-GrownDec 01, 2023
Lightbox Teams Up With Brand Founded by Former Tiffany Exec

The lab-grown diamond brand also collaborated with the website The Future Rocks on a collection launching today.

Lila Moss Calvin Klein campaign
FinancialsDec 01, 2023
Movado Lowers Guidance Again After Q3 Sales Dip

The company said it is facing a “challenging retail environment” but is prepared for the holiday season.

Muzo emerald and argyle pink diamond necklace
CollectionsDec 01, 2023
Piece of the Week: Muzo’s Emerald and Argyle Pink Diamond Necklace

It’s the hero piece of the newest "Green Jewel" collection, a collaborative offering from the two mines.

Pink Supreme Diamond
AuctionsNov 30, 2023
This Pink Diamond Reigned Supreme in Hong Kong

The 15.48-carat fancy intense “Pink Supreme” topped Christie’s fall jewelry auction in Asia, while a Patek Philippe led the watch sale.

Claire’s CFO COO Chris Cramer
MajorsNov 30, 2023
Claire’s Hires Former Bath & Body Works Exec as CFO, COO

Chris Cramer, who also spent time at Gen Z intimates brand Parade, will take on the dual role.

133 carat yellow diamond
AuctionsNov 30, 2023
Sotheby’s To Auction 133-Carat Yellow Diamond

The stone headlining the upcoming sale could fetch up to $5 million.

Kwiat diamonds
IndependentsNov 30, 2023
Frank Adams Rolls Out Kwiat’s ‘Mine to Shine’ Program

The retail offering lets customers track their diamond’s journey.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy