CONSUMER PRODUCTS AND RETAIL E-SSENTIALS

USA: FTC revised jewelry guide

july 2018- Relevant for: hardlines

On 24 July 2018, the Federal Trade Commission (FTC)¹ revised the Guides for the Jewelry, Precious Metals, and Pewter Industries (“Guides”). The Guides (16 CFR 23) helps US consumers to obtain accurate information and industries can avoid making deceptive claims. After six-year of review, FTC finally adopted the revision and it is effective once it is published on the Federal Register.

The Guides2 applies to a wide range of jewelry industry products, for example, gemstones and their laboratory-created and imitation substitutes; natural and cultured pearls and their imitations; and metallic watch bands not permanently attached to watches. It is also applicable to eyewear frames, pens and pencils, flatware, and hollowware, articles made from precious metals (gold, silver, and platinum group metals), precious metal alloys, and their imitations and all articles made from pewters. Even though the Guides do not impose legal obligation, companies involved in the trade should observe the interpretation.

This revision is in-line with Section 5 of the FTC Act. If a material statement or omission of information is misleading to consumers, the act or the practice is considered as deceptive. Moreover, FTC decided3 not to align the Guides with international standards generally as it is needed to align with the Section 5 of FTC Act. The amendment is beneficial to consumers and competition. For example, companies can decide whether to advertise their products’ with precious metal coatings. The following key areas are revised in the Guides:

• Surface application of precious metals;
• Alloys with precious metals in amounts below minimum thresholds;
• Products containing more than one precious metal;
• Composite gemstone products;
• Varietals;
• “Cultured” diamonds;
• Qualifying claims about man-made gemstones;
• Pearl treatment disclosures;
• Use of the term “gem”;
• Misleading illustrations;
• Diamond definition;
• Exemptions recognised in the assay for gold, silver, and platinum.

[1] FTC Press Release

[2] Federal Registry notice for the revised Guides 

[3] Statement of Basis and Purpose: Final Revisions to the Jewelry Guides