FTC Says Jewelers Must Disclose Gem Treatments Affecting Value

December 5, 2000

FTC Says Jewelers Must Disclose Gem Treatments Affecting Value

The Federal Trade Commission, in a long-anticipated decision, voted 5-0 on Dec. 1 to amend its Guides for the Jewelry Industry to require disclosure of all gem treatments that significantly affect the value of a gemstone. The Commission concluded use of the term "significant value" in its revised Section 23.22 is necessary to limit disclosure to treatments affecting value enough to influence a consumer's purchasing decision.

Formerly, the Guides only required disclosure of gem treatments when they were not permanent or when a treated gem required special care. But a 1998 Jewelers Vigilance Committee petition asked the FTC to add diamond laser drilling to its list of diamond treatments that must be disclosed because the treatment affects a diamond's value.

JVC's value argument caused the FTC to consider the wider issue of the value of any gem in its natural state versus after it has been treated. Since treated gems usually carry different price tags than untreated ones, the FTC concluded such differences in price must be disclosed to prevent unfair or deceptive practices. The FTC declined to add language to protect retailers who have been misled about a gem's treatment, but assures jewelers it will use discretion in such situations.

JVC will work with the FTC to identify the specific gem treatments that significantly affect value, are non-permanent or require special care. The FTC did not want to include a comprehensive list in its succinct Guides; instead it will publish the list in its consumer and business materials.

More information on the revision is available at www.ftc.gov or by calling JVC at (212) 532-1919.

- by Peggy Jo Donahue