Professional Jeweler Archive: Disclosure Disagreement

September 2000

Gemstones & Pearls: News

Disclosure Disagreement

ATGA criticizes JVC/JA position on proposed change to the FTC Guides

The American Gem Trade Association has publicly opposed a planned revision of the FTC’s Guides for the Jewelry Industry regarding disclosure of gem enhancement.

The proposal says permanent enhancements that don’t create special care requirements should be disclosed if they significantly affect the gem’s value and if the seller knows or should know about it at the time of sale. Currently, disclosure isn’t required if an enhancement doesn’t create special care requirements regardless of the effect on value.

The Jewelers Vigilance Committee and Jewelers of America support the proposal, which the FTC was expected to rule on at presstime. But AGTA denounced that position, saying all enhancements are performed to increase a gem’s value and that any attempt to imply otherwise goes against the fundamental property of rarity in untreated gems. AGTA also says the proposal would create loopholes in gemstone enhancement disclosure and questions who would determine what constitutes a significant affect on value.

In an open letter to the trade, AGTA argues that if the proposal is adopted, it effectively says: “If the treatment does not have an effect on the stone’s value, and/or if the treatment is not known at the time of sale, the treatment need not be disclosed.

Tell All?

AGTA feels all enhancements should be disclosed and that ignorance shouldn’t absolve a seller of the responsibility to disclose, the letter says. “If the gemstone in question belongs to a group that is routinely enhanced,” it says, “the seller must assume it has been enhanced, even if he is unaware of whether the treatment has been performed.”

JVC Executive Director Cecilia Gardner counters that a seller can’t disclose what isn’t known. On the question of what constitutes a significant affect on value, she says the FTC wouldn’t prosecute an allegation of insignificant deception regarding value.

The word significant is open to interpretation, of course. But AGTA argues that gems would not be put through expensive enhancement processes unless their value and marketability improve as a result.

JA President Matthew Runci says the proposal doesn’t leave a loophole, as AGTA says. “With this language, potential complainants are informed the FTC will not take up allegations of failure to disclose based on insignificant differences in value,” he says.

– by Robert Weldon, G.G.

Burmese spinel typically isn’t enhanced. This untreated example is courtesy of Cynthia Renée Co., Fallbrook, CA; (760) 728-5150.

Oiling changes the value of an emerald significantly. But AGTA questions whether value should be an issue in the FTC Guides regarding enhancement disclosure. The Colombian emerald is courtesy of Ronald Ringsrud Co., Saratoga, CA; (408) 741-9077.

Copyright © 2001 by Bond Communications