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DPA Raises Concerns over Synthetics Marketing

Aug 6, 2018 5:40 AM   By Rapaport News
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RAPAPORT... The Diamond Producers Association (DPA) is worried lab-grown diamond suppliers will use the new Federal Trade Commission (FTC) guidelines to confuse consumers — a claim synthetics companies reject.

The FTC last month removed the word “natural” from its definition of diamond, enabling growers to claim their stones are 100% diamond. However, they still must disclose that they are not from the earth.

“We understand the basis for this decision,” the DPA — an alliance of leading miners — said in a statement last week. “But we are concerned that it will be exploited by man-made diamond marketers, who may feel they can use the term ‘diamond’ without properly qualifying it, leading to more consumer confusion and deception.”

Yet the lab-grown sector has no intention of falling foul of the FTC’s disclosure requirements, the International Grown Diamond Association (IGDA) confirmed to Rapaport News.

“[Our members] will continue to proudly and openly label and promote our products as lab-grown, cultured, etc., as defined by the FTC,” said IGDA secretary general Richard Garard in an email Thursday. “There is no question that IGDA and our members gladly promote that fact.”

Garard highlighted the FTC’s new stance on the term “synthetic,” which no longer appears on the commission’s list of recommended words for describing lab-grown stones. Competitors use the label to make lab-grown diamonds sound like fakes, IGDA argued to the FTC during its review process. The “real question” is whether natural-diamond promoters will comply with the updated advice, “since they can no longer use disparaging terms about grown diamonds,” Garard said.

“If they follow the guidelines and also stop using the term synthetic, which is acknowledged by [the] FTC and the [Jewelers Vigilance Committee] to confuse the consumer, the confusion [among] consumers will easily go away,” he added.

However, the FTC only outlaws the word “synthetic” completely when the user is trying to deceive consumers into thinking a lab-grown stone is in fact a simulant such as cubic zirconia or moissanite, the DPA noted.

The DPA also took issue with the FTC’s conclusion on the phrase “cultured diamonds,” which it refused to ban because, it claimed, marketers can successfully qualify the word to remove any confusion. The DPA had argued to the FTC that the term was not appropriate for lab-grown diamonds because the manufacturing process “begins and ends in a factory,” unlike with cultured-pearl growth, which is a “symbiotic relationship between man and nature.”

“The implications of this decision [are] likely to be more consumer confusion and deception,” the DPA said last week. The suggestion that marketers can use a “factually incorrect” term so long as they clarify it through additional language is a departure from previous FTC practice, the DPA added.

While the DPA “welcomes” the new guidelines and commits to respecting them, the new rules “introduce the possibility of substantial consumer deception and harm in several important respects,” the association continued.

“Unless the FTC further clarifies these issues, the agency will likely need to address a large number of claims on a cumbersome case-by-case basis. DPA had hoped that the agency would provide clearer guidelines for [the] industry on these important issues.”

Image: Lark & Berry
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Tags: cubic zirconia, cultured, cultured diamonds, Diamond Producers Association, Dpa, federal trade commission, ftc, FTC guidelines, IGDA, International Grown Diamond Association, Jewelers Vigilance Committee, JVC, lab-grown diamonds, moissanite, pearl, Rapaport News, Richard Garard, Synthetic diamonds, Synthetics
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