FTC RULES ON DISCLOSURE
LEAD-GLASS FILLED RUBIES
KNOW THE LAW
BY Suzan Flamm, JVC Assistant General Counsel
A lead-glass filled ruby, sometimes referred to as a “composite ruby,” is a different species altogether from a “ruby.” Typically, the corundum used in a lead-glass filled stone is of a low quality. The final product may contain more glass than precious stone, is manufactured in abundance, and is far less valuable than a traditionally-heated ruby of similar size, color and shape. Some of these products actually consist of multiple pieces of corundum, from different stones, fused together by lead glass.
Describing “Composite Ruby”
The Federal Trade Commission regulates the use of many of the words associated with jewelry products, including “ruby,” “gem” and “natural.” Understanding the proper use of these words, as defined in the FTC’s Jewelry Guides, is the first step in determining the exact nature of the disclosure required.
As a starting point, the Guides state that “it is unfair or deceptive to use the unqualified [word] ‘ruby’…to describe any product that is not in fact a natural stone of the type described.” As to the use of the word “natural,” the FTC also provides boundaries, stating: “It is unfair or deceptive to use the word … ‘natural’ … to describe any industry product that is manufactured or produced artificially.”
The word “gem” is also subject to restrictions, as follows: “It is unfair or deceptive to use the word ‘gem’ to describe, identify, or refer to a ruby … product that does not possess the beauty, symmetry, rarity, and value necessary for qualification as a gem.”
Applying these rules, a seller must determine whether or not the stone sold is properly described as either “natural”, a “ruby” or a “gem.” For composite ruby, the words “natural“ or “gem” are probably inappropriate descriptors. Further, the unqualified word “ruby” is not appropriate – it should always be described as “composite” or “lead-glass filled” ruby.
The second issue to be considered is what treatment disclosures should be made. The FTC requires that, in most cases, a seller disclose to a buyer that a gemstone has been treated. If disclosure is necessary, it is necessary at all levels of commerce: manufacturers to suppliers, suppliers to wholesales, wholesalers to retailers, and, of course, retailers to consumers.
The FTC Guides require that disclosure of a gemstone treatment be made under any of these three circumstances: first, if the treatment is not permanent; second, if the treatment causes the need for special care; and, third, if the treatment affects the value of the stone.
With composite ruby, special care is required, and the stone may change in appearance over the life of the product. Finally, the treatment to which this stone has been exposed certainly impacts the value. So, full and detailed disclosure is necessary, including some pointers to the consumer/purchaser how to keep the product looking great.
It may not always be obvious whether or not a disclosure is mandatory. If a jeweler is not sure, the best practice is to disclose. This is not only fair to the buyer, but will protect the jeweler in the event that the treatment turns out to be impermanent, to require special care, or to affect the value of the gemstone.
Failure to make a required disclosure is a violation of federal law, and exposes the non-disclosing company to enforcement action by the FTC. State laws also prohibit deceptive practices aimed at misleading consumers. For instance, a pattern and practice of failing to disclose would violate New York State law and subject a retailer to criminal penalties.
JVC members can access more information in JVC’s Forms Bank, Gemstone Treatment Disclosure, on JVC’s website.
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