Underkarating Exposé Airs

January 23, 2002

Underkarating Exposé Airs

"Inside Edition," a syndicated magazine show, profiled the gold jewelry world in a show broadcast Jan. 22. "Inside Edition" asked the Jewelers Vigilance Committee questions about the industry and used JVC's Precious Metals Testing laboratory to assay items purchased from various retailers in New York City and Houston, TX.

"We were gratified that 'Inside Edition' cared enough about the accuracy of its story to do complete research," says Cecilia L. Gardner, JVC executive director and legal counsel. "Because of our equipment and legal expertise, we were asked to test the items 'Inside Edition' investigators purchased to see if the items were indeed as marked. In some cases, there was underkarating."

Underkarating refers to gold that is represented or marked with a quality mark (10k, 14k or 18k) but is revealed by assaying to be of a lesser quality. The JVC Precious Metals Testing Facility uses a non-destructive X-ray assay to determine karatage of precious metal jewelry.

"Inside Edition" researched the gold market in New York City and did limited buying in Houston. Using a hidden camera, it shopped in various locations including chain stores, mall kiosks, flea-market booths, jewelry exchanges and free-standing jewelry stores.

Gold purchased from chain stores and well-known jewelry stores was accurately marked, the program found. However, some flea-market booths, mall kiosks and jewelry exchanges were selling underkarated gold. These underkarated items were lower-priced goods.

The Jewelers Vigilance Committee, founded in 1917, is a not-for-profit trade association whose mission is to maintain the jewelry industry's highest ethical standards. JVC offers compliance monitoring, dispute arbitration and precious metals testing among many other services.

Frequently Asked Questions About Underkarating
from the Jewelers Vigilance Committee

As a retailer or a manufacturer, you have a legal obligation to inform your customers of the karatage of products you sell. If an item is not stamped, you still must disclose the karatage and are responsible for knowing it.

Q: Do all pieces of precious metal need to be marked with a karat stamp and a trademark?
A: No, the National Gold & Stamping Act says you may stock and sell items that are not quality marked. However, as part of the sales process, you must disclose to your customer what the karatage is through such means as in-case signs, tags or sales receipts. If the pieces are quality marked, a federally registered manufacturer's trademark must be in close proximity to the quality mark on the piece of jewelry.

Q: How do I know that the markings on the jewelry I sell are correct? A: Many firms use JVC's Precious Metals Testing Facility's X-ray assay to quality-control the precious metals. Items may be tested by other methods such as fire assay. Ask your suppliers to rountinely conduct independent assays as a part of your sales contract. Retail stores should regularly check karatage as part of their quality assurance programs.

Q: What minimum karatage of gold can I legally sell in my store?
A: In the U.S., the lowest karatage of gold that can be sold legall is 10k (in newly manufacturer pieces). In other countries, standards vary.

Q: Does the metal content need to be exactly as stamped on the piece?
A: The FTC Guidelines allow for certain tolerances on gold and silver items, but the variance is quite narrow. The standard for platinum allows for no tolerances; pieces must be exactly as marked. Contact JVC with questions.

Q: What should I do if I suspect I purchased underkarated gold?
A: Please contact JVC with your questions.

Q: What can my customers do if they think they've purchased underkarated gold?
A: Any consumer may contact JVC or other agencies, such as the local Better Business Bureau or Department of Consumer Affairs.

Q: Where can I get a complete copy of the FTC Guides?
A: Visit the FTC website at www.ftc.gov or contact JVC for further information at (212) 997-2002, www.jvclegal.org.

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