The Federal Trade Commission (FTC) has cautioned several companies over seemingly deceptive online ads featuring simulated or lab-grown diamond jewellery, which could be in violation of the FTC Act.

Under the new Jewelry Guides issued in July 2018, representations for non-mined diamonds must be clear and conspicuous, the commission said.

Eight letters sent to the jewellers, which the FTC did not name, expressed concerns that some of the companies’ advertising materials don't conform to the guides, and may be deceiving consumers. Specifically, the ads might imply that a simulated diamond is a lab-created or mined diamond, or that a lab-created diamond is a mined diamond. Required disclosures about the source of the diamonds are likewise not placed near individual product descriptions.

The letters warned them not to use the name of any precious stone, including diamonds, to describe a simulated or lab-created stone, unless it is immediately proceeded by a clear and conspicuous disclosure such as "lab-grown" or "lab-created," among others. FTC also encouraged vendors of simulated diamonds to avoid describing their products in a way that may falsely imply that these have the same optical, physical and chemical properties as mined diamonds.

Similar non-deceptive disclosures are required when advertising jewellery containing precious stones other than diamonds, including emeralds and rubies, as well as pearls, the FTC said.

Companies that advertised their jewellery as “eco-friendly,” “eco-conscious,” or “sustainable,” were also reprimanded by the commission, adding that that such terms can be interpreted to imply certain specific environmental benefits. 

“Sellers must have a reasonable basis for making such claims for any products and the claims should be adequately qualified to avoid deception,” remarked the commission. “The letters admonish the companies not to use unqualified claims such as ‘eco-friendly,’ ‘eco-conscious,’ or ‘sustainable,’ as it is highly unlikely that they can substantiate all reasonable interpretations of these claims.”

The Diamond Producers Association (DPA) meanwhile welcomed the FTC warning and described it as an important step toward transparency and consumer protection.

“It is now crystal clear that synthetic diamond manufacturers cannot use the word ‘diamond’ without qualifying it with an unambiguous descriptor,” said DPA. “It is also clear that the FTC will not tolerate unsubstantiated claims about the environmental impact of synthetic diamonds that violate the FTC’s Green Guides. The DPA will continue to support the FTC’s efforts to ensure that consumers are protected.”