In recent years, the obligation to fully disclose all gem treatments has changed from a mere ethical responsibility to a legal one. The U.S. Federal Trade Commission Guides for the gem and jewelry trade, which were fairly simple rules in the early 20th century, now require disclosure of any treatment to a gem material that substantially affects its value. In addition, all state deceptive trade practice regulations in the U.S. require that vendors not mislead customers as to the treatment status of gems they sell. Finally, vendors should also be aware that insufficient disclosure can subject them to substantial civil liability for fraud by nondisclosure. Several case studies demonstrate the serious risks involved in not complying with this body of rules and regulations. Suggestions for avoiding legal problems are provided.
Appendix A: Excerpts from the FTC Guides
Capsule Descriptions of Cited Cases
U.S. State Laws Governing Deceptive Trade Practices and Gem Disclosure Obligations
Submitted by Thomas W. Overton