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U.S. WATCHDOG SHOWS YELLOW CARD TO LAB-GROWN PRODUCER FOR LANGUAGE USED IN DESCRIBING ITS PRODUCT

 

The issue of distinguishing laboratory-grown from natural diamonds has come under the spotlight once again, with the rapping over the knuckles of one of the United States’ more prominent lab-grown diamond producers by a prominent watchdog body, the National Advertising Division (NAD) of BBB National Programs.

Once part of the Council of Better Business Bureaus, BBB National Programs is today an independent, non-profit organization that oversees more than a dozen national industry self-regulation programs. Its National Advertising Division reviews ad campaigns in all media, judging their messages for truth and accuracy, to protect consumers and level the playing field for businesses.

In a statement put out by NAD, the organization said that it had formally recommended that the California based laboratory-grown diamond producer, Diamond Foundry, modify its advertising by clearly and conspicuously disclosing the origin of its laboratory-grown diamonds, which it manufactures and retails directly to consumers through its subsidiary and e-commerce platform.

More specifically NAD called on the Diamond Foundry to discontinue the use of certain terms that could create confusion among consumers about the origin of its products, as well as modifying certain website claims to more prominently disclose the man-made origin of its products, and discontinue or correct certain social media claims that its LGDs are “real” diamonds.

 

UNQUALIFIED USE OF WORD ‘DIAMOND’ MISLEADING

The compliant to the watchdog body had come from the Natural Diamond Council, which formerly was known as the Diamond Producers Association and is a body representing seven of  the world’s leading diamond companies, who together account for about 75 percent of the world’s rough diamond production.

In particular, the Natural Diamond Council challenged certain social media advertising in which Diamond Foundry-brand diamonds were advertised simply as “diamonds,” without any accompanying description or disclosures identifying the diamonds being man-made.

The unqualified use of the word “diamond” has been a bone of contention, particularly in the United States, where some lab-grown diamond producers have claimed that the right to use the term is shared equally by both the natural and synthetic diamond sectors. This, they say, is because it now accepted that  that both products share the same chemical and physical characteristics.

The National Advertising Division of BBB National Programs, which was critical of the language being used to market laboratory-grown diamonds, reviews ad campaigns in all media, judging their messages for truth and accuracy, to protect consumers and level the playing field for businesses.

But NAD determined that Diamond Foundry must, consistent with the U.S. Federal Trade Commission (FTC) Jewelry Guides, make an effective disclosure that its diamonds are man-made. It recommended that Diamond Foundry modify its advertising to make these clear and conspicuous disclosures immediately preceding, with equal conspicuousness, the word “diamond.” 

Furthermore, to avoid communicating a misleading message, NAD recommended that Diamond Foundry should also account for the fact that consumers may view and purchase its products while using mobile devices and that such disclosures should be typically visible on mobile devices without the need to scroll down to view them.

The U.S. Federal Trade Commission Jewelry Guides demands effective disclosure that its diamonds are man-made, meaning there should be clear and conspicuous disclosures immediately preceding, with equal conspicuousness, the word “diamond.” 

CLAIM OF ‘REAL’ COULD BE CONFUSING

NAD also considered the terminology used by Diamond Foundry in its advertising to identify its products as lab-grown diamonds. It determined that the company’s use of the terms “created diamonds,” “diamonds created aboveground,” “sustainably created” or “sustainably grown,” and “world positive,” as they appear in the context of the challenged advertising do not sufficiently communicate that the diamonds are laboratory-grown and unmined. Therefore, it stated,consumers may be confused and not distinguish between the origins of Diamond Foundry’s man-made goods and competing mined diamonds.

Nonetheless, NAD noted that nothing in its decision precludes Diamond Foundry from using the phrase “diamonds created aboveground” if it appears in a context where it is clear that the the stones are man-made.

Regarding the advertiser’s claims on its Diamond Foundry website, NAD voiced some concern that the plain header on the page that reads “Real” may lead to confusion as to the diamond’s origins. To avoid conveying the misleading message that the LGDs are mined diamonds, NAD recommended that Diamond Foundry modify its claims on this page to more prominently disclose the man-made origin of its diamonds.

Additionally, NAD recommended that the advertiser discontinue social media claims that its LGDs are “real” diamonds or modify the claims to make clear that its LGDs are not mined diamonds.  NAD found that, without context explaining that “real” diamonds are created in a laboratory and not mined, consumers may reasonably take away the unsupported message that Diamond Foundry’s diamonds are mined diamonds.

In a statement, Diamond Foundry stated that it will comply with NAD’s recommendations. Further, the advertiser thanked NAD “for their time and attention in providing industry regulation of advertising claims,” but noted that it disagreed with certain aspects of NAD’s decision.

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