Markets Wired

In response to industry changes, the Federal Trade Commission today announced revisions to its Jewelry Guides to help ensure that consumers are not deceived when buying platinum products and that marketers understand how certain new platinum/metal alloys – products made of a combination of platinum and non-precious “base” metals – should be described and advertised.

In recent years, some marketers have added base metals, such as copper and cobalt, to platinum jewelry sold to consumers. While this has made jewelry marketed as “platinum” more affordable, it also has made buying it more complicated. and increased the need to clarify how combination platinum/base metal alloy products should be marked and advertised to prevent deception.

In a Federal Register notice describing the changes to the Platinum Section of the FTC’s Guides for the Jewelry, Precious Metals, and Pewter Industries, the FTC states how marketers should mark or describe “platinum/base metal alloys,” which contain between 50 and 85 percent platinum.

Specifically, the new Platinum Section states that marketers of platinum/base metal alloys should: 1) disclose the product’s full composition, by name and not abbreviation, and the percentage of each metal it contains – for example, 75% Platinum, 25% Copper or 60% Platinum, 35% Cobalt, 5% Rhodium; and 2) disclose that the product may not have the same attributes or properties as traditional platinum products, which are comprised of at least 85 percent pure platinum.

The amendments further state that marketers need not make the second disclosure if they have competent and reliable scientific evidence that a product is materially the same as one containing at least 85 percent pure platinum, based on a variety of attributes such as durability, luster, and hypoallergenicity. The notice also provides background information on the FTC’s review process, discusses the public comments received during the review, and describes how the Platinum Section has been updated. The updated Guides became effective on December 28, 2010, the date they were published in the Federal Register.

The FTC issued the Jewelry Guides and their Platinum Section to help manufacturers avoid making claims that are unfair or deceptive under the FTC Act. Industry guides are administrative interpretations of the law and are not independently enforceable. However, the FTC can take action under the FTC Act if a business makes marketing claims that are inconsistent with the Guides and it believes such claims are unfair or deceptive, in violation of the FTC Act.

New Consumer and Business Education

The FTC has issued two new publications to help consumers and businesses understand and comply with the changes to the Jewelry Guides. “Going Platinum: What to Look for When Buying Platinum Jewelry,” is intended to help inform consumers before they go shopping. It explains that while traditionally platinum jewelry contained 85 to 95 percent pure platinum alloyed with other precious metals, in recent years, some platinum pieces have been alloyed with a larger percentage of non-precious metals, such as copper and cobalt.

It suggests that consumers ask their jeweler about the attributes of any piece of platinum jewelry they are considering buying, so they can have an idea of the piece’s quality and value for the cost. It also describes and explains how platinum jewelry is marked, and provides a table with examples of markings they are likely to see.

The business education publication, “Advertising Platinum Jewelry,” describes how the platinum content of jewelry should be marked and advertised to comply with the changes to the Jewelry Guides. It also describes when disclosures should be made, and states that they should not be misleading and should disclose material information to customers. For example, if the platinum/base metal-alloy item being sold does not have the properties of products that are almost pure platinum, or have a very high percentage of platinum, this should be disclosed to potential buyers.

The document also describes terms used in advertising platinum jewelry, as well as how such jewelry should be labeled. It also provides a table with marking examples and what percentage platinum and alloy the marked jewelry should contain.

The Commission vote approving issuance of the Federal Register notice amending section 23.7 of the Guides (taken before Commissioners Edith Ramirez and Julie Brill joined the FTC) was 4-0. The Commission vote to modify the Federal Register notice to amend section 23.0 of the Guides was 5-0.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.

(FTC File No. G711001)
(Platinum Guides.final)