Last month the FTC sent staff warning letters to eight firms advertising simulated or laboratory-created diamonds. According to the letters, the companies had promoted their products without adequately disclosing that they weren’t mined diamonds. Since then, industry members have been talking about the best ways to ensure compliance with the FTC’s Jewelry Guides, which are designed to help companies avoid confusing or deceiving consumers. We posed some of the questions we’ve heard to FTC attorney Robert Frisby.
Our company sells simulated or laboratory-created diamonds as alternatives to mined diamonds. Should we disclose that our products aren’t mined?
ROBERT: Yes. To avoid the risk of deceiving consumers about the type of jewelry you offer, advertisers selling simulated or laboratory-created diamonds should disclose that the products aren’t mined diamonds. Describing simulated or laboratory-created diamonds merely as “diamonds,” without more, would likely convey the false impression to consumers that they’re buying mined diamonds. Using a brand name that includes the word “diamond,” without qualifying your claim with a clear explanation, would present the same problem. (In this context, a “qualified” claim means a claim that is appropriately limited, explained, or narrowed.) Similarly, describing a simulated or imitation diamond like cubic zirconia as a “laboratory-created diamond” without a clear qualification would likely lead consumers to the inaccurate conclusion that the product has the same optical, physical, and chemical properties as a laboratory-created or mined diamond.
What terms should we use to disclose that our simulated or laboratory created-diamonds aren’t mined diamonds?
ROBERT: Use terms that clearly convey to consumers that the item is a simulated or laboratory-created diamond, rather than a mined diamond. Although the FTC’s Jewelry Guides don’t specify the wording you should use to make this disclosure, the Jewelry Guides state that the terms “laboratory-grown,” “laboratory-created,” “[manufacturer name]-created,” “imitation’’ or ‘‘simulated” would be appropriate to describe the nature of the product and to disclose the fact that it’s not a mined diamond. The Guides give advertisers flexibility to use another “word or phrase of like meaning” to make the disclosure. However, if you choose to use alternative phrases, exercise care to ensure that consumers understand them.
How and where should we disclose that simulated or laboratory-created diamonds are not mined diamonds?
ROBERT: What matters is that consumers see the disclosure, read it, and understand what it means. That’s why advertisers should make those disclosures clearly and conspicuously, and in close proximity to where the ad uses the term “diamond” to describe the jewelry. In addition, the disclosure should appear early in the product description. Putting it at the end of a lengthy block of text or on a different webpage – for example, on an FAQ or “diamond education” page – won’t suffice because consumers might skip over it. However, in a particular ad, you may not have to make the same disclosure repeatedly if the nature of the items offered for sale is clear from the context.
In social media advertising, can we make disclosures through hashtags?
ROBERT: Exercise care when using hashtags to disclose information that is necessary to avoid deception. A hashtag at the end of a social media post might not convey the information effectively, especially if appears in a string of other hashtags or if the other hashtags arguably contradict it. For example, a list of hashtags including both #diamonds and #labgrown might confuse consumers about whether the product contains mined diamonds. Just a reminder: Advertisers are responsible for all reasonable interpretations of their advertising, including ads on social media that make claims or that fail to make adequate disclosures.
What if we want to tout the environmental benefits of our simulated or laboratory-created diamonds?
ROBERT: The FTC’s Guides for the Use of Environmental Marketing Claims – the Green Guides – offer advice on how to make environmental claims non-deceptively. Keep two basic principles in mind: 1) Advertisers must have a reasonable basis for any environmental benefit claims they make for their products; and 2) Advertisers must qualify their claims adequately to avoid deception. The Green Guides advise advertisers to avoid making unqualified general environmental benefit claims – for example, “environmentally friendly” – because it is highly unlikely the advertiser can substantiate all reasonable interpretations of these claims. The better practice is for advertisers to qualify a general claim by disclosing the specific reasons why the product has environmental benefits. Section 260.4 of the Green Guides features examples of claims that are appropriately qualified under the circumstances.