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November 1999

Professional Insider: In the industry

JVC/JA Task Force Endorses FTC Changes

Proposal calls for disclosing treatments that affect a gem's value

A joint task force of the Jewelers Vigilance Committee and Jewelers of America has endorsed proposed changes to the FTC Guides for the Jewelry Industry that would require disclosure of all treatments that significantly affect the value of a gem. Currently, The Guides require disclosure only if treatments aren't permanent or require special care.

The FTC proposed the changes in June and asked for comments by the end of August. Supporting the task force's comments were industry organizations such as the Diamond Promotion Service, the American Gem Society, the World Federation of Diamond Bourses and the New York Diamond Dealers Club.

The two sections that could change to require disclosure if a treatment significantly alters a gem's value are:

  • 23.13 (Disclosing existence of artificial coloring, infusion, etc.).
  • 23.22 (Deception as to gemstones).

The task force suggested two additions to the FTC for its consideration. First, it proposed adding a phrase saying disclosure is required only "if said treatments are known or reasonably should have been known at the time of sale." This addition could protect jewelers from liability for failing to disclose treatments about which they were unaware and could not reasonably have detected. Without this stipulation, the jeweler would be liable even if the deception was unintentional.

It also asked the FTC to define "significant" when discussing value to say more specifically how much a treatment must affect a gem's value before disclosure is required. The FTC would need to ponder what percent of change in value the treatment would have to cause for it to be considered material to the average or reasonable consumer.

by William H. Donahue Jr.



Copyright © 1999 by Bond Communications.



 

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