Professional Jeweler Archive: FTC Guides Revision: Lingering Issues

June 2000

Professional Insider/In the Industry


FTC Guides Revision: Lingering Issues

Ruling due soon on disclosure arguments


The Federal Trade Commission should rule by the end of summer on changes to the Guides for the Jewelry Industry regarding gem disclosure, says Cecilia Gardner, executive director of the Jewelers Vigilance Committee. Arguments remain about the wording of the revisions. The controversy centers on two issues.

Significance

The proposed revision reads that disclosure is warranted for any treatment with a significant effect on the value of the diamond or colored gemstone. Some critics believe use of the word significant to modify value will leave an interpretive loophole. In other words, who decides what is significant?

Critics say such judgment would place an undue burden on retailers or that unethical jewelers could say they don’t believe the difference in value is significant. There’s also confusion whether the value statement refers to:

  • The difference in value between a treated gem and a comparable untreated gem.
  • Or the difference in value of a particular gem before and after it’s treated.

Consumer or Retailer Knowledge

The other issue is a proposal that would require disclosure of any treatment that affects a gem’s value if a consumer, acting reasonably under the circumstances, could not ascertain the gem has been treated. Critics say this would be unfair to consumers because the majority are unaware of even routine gem treatments.

Some also say it would be unfair to jewelers because it would require them to make judgments about what their customers do and don’t know. It also could give unscrupulous jewelers a loophole to argue the consumer knew or should have known about the treatment so the jeweler isn’t liable for non-disclosure. At the very least, this provision has the potential to complicate the enforcement process.

– by William H. Donahue Jr.


Copyright © 2001 by Bond Communications