Gemstones & Pearls News
FTC Guidelines Revisited
Gem dealers react as the FTC takes a new look at treatment
T he question of how much to disclose about colored gem enhancement
was under consideration this summer as the Federal Trade Commission
sought input on its proposal to update the FTC Guides for the
Under the 1996 revision of the FTC Guides, enhancements that
are considered permanent and don't require special care are exempt
from disclosure. This opens the door to misrepresentation by
the unknowledgeable and deception by the unscrupulous, and this
could cause problems with consumers. For example, a consumer
who buys a sapphire and finds out later it was enhanced might
easily feel cheated about its true value.
Does Value Count?
Value is at the core of the proposed changes. The FTC posted
the following information in the Federal Register, Vol. 64, No.
109, and invited industry comment until Aug. 31:
"The [FTC] seeks comment on whether paragraph 23.22 of
the Jewelry Guides should be revised to advise that permanent
treatments that do not require special care should be disclosed
if the treatment has a significant effect on the stone's value,
and if a consumer acting reasonably under the circumstances could
not ascertain that the stone has been treated."
Some dealers agree the FTC Guides should change, but they
question value considerations. The American Gem Trade Association
board discussed the issue with members and intended to submit
comment by the Aug. 31 deadline, according to Roland Naftule
of Nafco Gems Ltd., Scottsdale, AZ, who chairs the AGTA Industry
Rules Committee. "Speaking for myself, I believe we must
strive for full disclosure of any gem enhancement," he says.
"But I believe the FTC's approach to value could confuse
consumers because no two gems are alike. I would just say treated
gems of any kind need to be disclosed period."
The word "significant" in the proposal worries some
dealers. "Does that mean a 1% price differential is OK and
a 100% differential is not?" asks Dana Schorr of Schorr
Marketing and Sales, Santa Barbara, CA. "Who will make those
determinations and how?"
Schorr says the FTC should focus on disclosure of all enhancements
rather than price differences between natural and enhanced gems.
"I don't feel I have the responsibility to inform customers
of every option that exists on the market," he says. "But
I do have the obligation to inform them fully of enhancement
of the gem they want to buy, regardless of value."
Big Value Differential
The FTC may have focused on value because it's the basis of so
much fraud. For example, fine natural-color rubies are coveted
as true rarities and cost much more than similar-looking color-enhanced
rubies. Should customers be aware of the choices? "You bet,"
says Gerry Manning of Manning International, New York City. "You're
entitled to ask more for natural-color gems, and customers are
entitled to know why."
With some gems, value considerations are irrelevant because
almost no unenhanced counterparts exist. Blue topaz, for example,
is inexpensive and nearly always color-enhanced. Natural blue
topaz is rare and generally lacks saturated color, so there's
no market data for comparison, and it's almost impossible to
determine whether the color is natural. Tanzanite is brown and
unsalable until heated to a purplish blue. No market data exist
for comparison with unenhanced tanzanite.
Advocates of full disclosure and legal experts agree that
whatever the FTC decides, retailers should err on the side of
caution and disclose all enhancements in writing. State laws
almost always protect consumers who feel they have been materially
by Robert Weldon, G.G.
||This natural-color blue sapphire, cut by John
Bradshaw, is more valuable than a similar looking one that owes
its color to heat enhancement or diffusion treatment.
Copyright © 1999 by Bond Communications.