September 16, 1999
Task Force Comments on FTC Guide Changes
A joint task force of the Jewelers Vigilance Committee and Jewelers of America says it approves of proposed changes to the Federal Trade Commission Guides for the Jewelry Industry but suggests several additions before the changes occur.
The task force's announcement answers the FTC's request for comments on the proposed changes, which would mandate disclosure of all gem treatments significantly affecting a gemstone's value. Other industry associations, including the Diamond Promotion Service, American Gem Society, Diamond Manufacturers and Importers of America, World Federation of Diamond Bourses and New York Diamond Dealers Club, supported the response. Currently, the Guides usually require gem disclosure only on treatments that are not permanent or that require special care.
The task force suggested several additions, however. First, it proposed adding a phrase saying widespread disclosure is required only if treatments are known or reasonably should have been known at the time of sale. This language would protect jewelers from "strict liability," or liability despite unintentional deception.
Second, the task force says additional definition of the word "significant" in terms of a treatment's effect on value is necessary. It suggests defining more specifically how much a treatment has to affect a gemstone before disclosure is required. The FTC says this amendment is not meant to require disclosure of treatments that only slightly change value. Legally, the question may have to be settled by setting forth a percentage of difference in value the treatment must cause to be considered meaningful to the average consumer.
- by William H. Donahue Jr.