Synthetic Diamonds and Consumer Confidence: Same Story, Same Rules!September 01, 16
Press accounts of parcels of diamonds, particularly melee parcels, containing amounts of undisclosed synthetic diamonds have repeatedly surfaced. Recent press accounts of the increase of production of synthetic diamonds have also been prominent.
Increased consumer advertising of synthetic diamonds is clearly apparent, not only in print, but also on Facebook and other digital media. And the marketing message targeting millennials that is delivered by sellers of synthetic diamonds: synthetic diamonds are eco-friendly, conflict free and the same – or better – than “mined” diamonds that do not benefit the communities where they are found and ruin the environment.
What’s a diamond dealer to do? Panic has set in. Solutions to protect and enhance the natural diamond industry are investigated. Magic language is formulated to try to protect sellers who unwittingly sell synthetic diamonds as natural. JVC gets calls, and we are urged to "do something!"
Well, JVC has been “doing something” for as long as I have been CEO. And we will continue to do what we do for the foreseeable future: explain the regulations and laws that apply to the sale of synthetic and natural diamonds, urge marketers to follow those laws in the interests of a level playing field for both natural and synthetic diamonds, and monitor advertising to make sure that sellers comply with their legal obligations.
So, at the risk of repeating ourselves, here is a summary review of the guidelines and laws that apply to the sale of diamonds, both natural and synthetic.
What language can I use to describe man made diamonds?
This subject is covered by the FTC Guides, and this has not changed since 1996. It’s been refined some, but there has been no change since 1996. You can call them “laboratory created” or “laboratory grown” or you are permitted to add the manufacturer’s name as in: Chatham created (or grown) diamonds”.
You are also permitted to add the word “cultured” as long as you immediately also use the words “laboratory grown” or “laboratory created.” So, “laboratory grown cultured diamonds” will pass muster. Using “cultured diamonds” with nothing more, however, will not. This has been true since the FTC wrote a guidance letter to the JVC on the subject of the use of the word cultured to describe synthetic diamonds in 2007.
A note about the use of the word “synthetic” to describe man-made diamonds: the FTC has said that the use of that word is ok, but has also stated that consumers could be confused, since they do not distinguish well between “synthetic” and “imitation”. So, while it is not prohibited, they see where it might be confusing. You can use “synthetic” – but consumers might not fully get it
What about those claims: “eco-friendly” and “conflict free” for man-made diamonds?
Making claims about a product when advertising is governed by the law applicable to all advertising: claims must be truthful and must be able to be substantiated. That rule applies to all claims about man-made diamonds. So, if you claim that your product is “green” or “eco-friendly” or any other claim that it is environmentally pure, you better be able to prove it.
I am no scientist, but producing synthetic diamonds in a factory setting using fossil fuels to produce high levels of electricity to synthesize carbon to diamond using high heat and pressure – well, I doubt that is too eco-friendly. JVC is often called upon to ask producers of synthetics to substantiate their claims of “eco-friendly”. So far, we have no information that leads us to believe that their techniques are eco-friendly, so we have repeatedly sought to modify these claims by synthetic producers.
As for “conflict free” – well, this claim is so vague as to have no real meaning. I suppose what marketers who make this claim are seeking to imply is that natural diamonds might be produced via conflict, while their synthetic diamonds produced in factories have not. Conflict where? And what about the Kimberley Process that has reduced the number of “conflict diamonds” (as they define it) from its initial small number, down to next to nothing?
And what about the good that natural diamonds do for the communities that are lucky enough to have this natural resource to exploit for the benefit of their communities? The income that diamond producers provide for millions of people employed in the production of diamonds (let alone the millions of jobs provided in the rest of the supply chain) cannot be ignored.
Is there some language a seller can use to protect themselves from liability if they sell a synthetic diamond without the proper disclosure?
Sorry: but the quick answer to this question is no. If a seller fails to disclose that it has sold a laboratory-created diamond, and sells it as natural, there is no forgiveness: ignorance is no excuse. But that is not to say that there is nothing a seller should do.
Here’s what the JVC recommends:
1. Check your suppliers. Implement real quality control over your supply of diamonds. Do not take anyone’s word for it. If you have to check a parcel from a supplier one or twice a year, do it! If you have to pull a piece apart every quarter, do it! Then tell your customers and suppliers that you are doing that. They will get your approach, and ultimately appreciate your efforts.
2. Get it in writing. Make sure your suppliers correctly and specifically identify the nature of the products they provide. In writing. This means written down – maybe in a vendor agreement? Don’t have one of those? You should…
3. Ask your suppliers what they do to protect their supply chain. Not getting good answers? Maybe this is not the supplier for you.
The above guidance is the same that the JVC has been providing for years. The process now under way to revise the FTC Guides will probably not change anything written here – so, this needs to be taken on board by everyone in the industry.