How to Avoid Marketing Hype When Purchasing Diamond Simulants

Russian Brilliants® would like to commend Suzan Flamm for her excellent article about surface treatments.  Her honesty precisely compliments our mission of accurate straight forward education for our customers. When our Master Jeweler Matt Meis first read her article he was so excited that he called Ms. Flamm to ask permission to publish it on our site. This article should be (with permission of the JVC) circulated to every buyer of Diamonds. From all of us at Russian Brilliants – Thanks to you Ms. Flamm.

Suzan R. Flamm, Esq., (suzan@jvclegal.org) is assistant general counsel of the Jewelers Vigilance Committee, which provides general educational resources and jeweler-specific advice. The advice is strictly the opinion of the JVC.

Advertisers are eager to distinguish their products from the competition. Success in the marketplace, in fact, depends on a marketer’s ability to differentiate his or her goods in a positive way. Naturally, this process generates a certain amount of puffery, generally defined as an exaggerated statement, made in a boastful manner that no reasonable consumer would ever rely upon in making a purchase. For example, a retailer’s claim that its diamonds “shine like stars,” is an obvious exaggeration. However, since reasonable consumers would not expect their new diamond ring to light up an entire solar system, they would not rely on the claim, and the advertiser would not be required to substantiate it.

Other claims, though, are likely to be relied upon by reasonable consumers when making purchasing decisions. The law requires that these claims be accurate and non-deceptive. Recently, advertisements made by several on-line sellers of diamond simulants were brought to the attention of the Jewelers Vigilance Committee. The claims made in these advertisements raised serious concerns about accuracy, confusion and deception and illustrate when advertisers must be able to substantiate specific claims--or refrain from making them.   

The advertising claims
Among the claims made in the questioned ads for diamond simulants, by various unrelated companies, were these:
- Our lab-grown diamonds are surfaced with real diamond.
- Our diamond hybrids are infused with diamond.
- Our diamond alternatives receive high grades from well-known labs. 

Elsewhere, on each website, the products were described as simulants. JVC purchased some of the advertised stones and had them tested by a qualified lab. The analysis indicated that the products were all cubic zirconia and that a “coating” was present on the stone. Further details regarding the nature of the coatings could not be determined by routine analysis.*

Background and FTC Guides
While diamond simulants can be made from a variety of materials, cubic zirconia has dominated the market since the 1970s, when commercial production of the substance began. More recently, some companies have sought to distinguish their simulants from those of the competition by coating the product with substances variously described as, among other things, “real diamond” or “diamond-like carbon.” 

The Federal Trade Commission’s Jewelry Guides includes standards for the marketing of natural diamonds, synthetic diamonds and diamond simulants. Different nomenclature is required for each product because they are each completely different in substance and value, a fact that would not always be apparent to an untrained eye. It is critically important--to the industry, to consumers and to the FTC--that purchasers not be deceived when selecting jewelry.

Here’s a summary of the FTC guidance for these products: 
- Advertisers may use the word “diamond,” without qualification, only for “a natural mineral” with defined characteristics, including a hardness of 10, a specific gravity of approximately 3.52 and a refractive index of 2.42. Even if a product meets this standard, it may not be described as a diamond if it has not been symmetrically fashioned with at least seventeen polished facets (with an exception for rose diamonds).
- A synthetic diamond is man-made. According to the FTC Guides, a product may be described as a synthetic only if it has “essentially the same optical, physical, and chemical properties” as a natural diamond. When describing these products, the word “diamond” must be preceded by the term “synthetic,” “laboratory-created,” “laboratory-grown” or “(manufacturer name)-created,” such as “Star-Bright Created Diamonds.” 
- A diamond simulant is also man-made, but does not have the same physical properties as a natural diamond. According to the FTC Guides, the word “diamond” may be used to describe this product, but only if it is qualified by the term “imitation” or “simulant.” Whether the product is a synthetic or a simulant, the qualifying term must immediately precede the word “diamond.”  

Back to the advertising claims
Clearly, each of the enumerated claims presents at least one, if not more, problems. In the first claim listed above, the diamond simulants were inaccurately described as "lab-grown diamonds" that were surfaced with "real diamond." Pursuant to the FTC Guides, the term "lab-grown" should not be used for simulants, but only for synthetics. Moreover, while we do not know what was used to coat the simulant, we do know that it was not "real diamond." Among other things, "real diamond" must be symmetrically fashioned with at least seventeen polished facets (other than rose diamond), and is easily identified by a qualified lab. 

A similar analysis applies to the second claim: “our diamond hybrids” are “infused with diamond.” Again, this advertiser failed to qualify the word “diamond” with the term “simulated” or “imitation.” The word “hybrid” is not mentioned in the Guides and is not an acceptable alternative to describe a simulant. Additionally, the reference to “infused with diamond” was confusing, and was not substantiated by the lab analysis which detected not a diamond infusion--if such a thing exists--but an unidentifiable coating.

In the third claim, the advertiser stated that its “diamond alternative receives high grades from well-known labs.” As above, the product was not accurately described as a simulant or imitation. Describing it as an “alternative” is not adequate. Equally disturbing, while simulants may vary in quality, it is not industry practice to assign grades to these products. A claim that “well-known labs” assign high grades to simulants is probably unsupportable.

The claims made by these advertisers do not qualify as mere puffery. They are far too specific to be dismissed by reasonable consumers as boastful exaggeration. Thus, they must be capable of substantiation. Since they are not, the retailers involved are exposed to enforcement action on the part of the FTC and to Lanham Act litigation on the part of competitors.

JVC has thus reached out to each of the companies to educate them on advertising standards and to encourage compliance with the laws that govern our industry. While some have already amended their marketing practices, the process continues as to others.   

Protection against legal and financial risk requires up-to-date information on advertising requirements, and other laws and regulations pertinent to the industry. The JVC is available to help with this task by providing educational resources and guidance on employee training. To order a copy of any JVC publication, please visit our website at www.jvclegal.org.

*While JVC articles are loosely based on actual cases, details may be drawn from a series of cases to illustrate a point.

http://www.nationaljeweler.com/nj/majors/a/~27612-Ad-basics-Marketing-diamond-simulants