Australia's $2.5 billion plus jewellery industry must ensure that its descriptions of its products are accurate, Australian Competition and Consumer Commission Deputy Chair, Ms Louise Sylvan, said today.
She was launching* the new guideline to the industry's rights and responsibilities under the national competition and consumer protection law, the Trade Practices Act 1974.
"The industry must be particularly careful about its description of jewellery – it must be truthful and provide adequate disclosure", she said.
"The guide sets out the ACCC's views on disclosure when gemstones have been treated and the use of the terms 'cultured', 'imitation', 'synthetic' and 'created' when they relate to natural, laboratory-made and artificial 'gemstones'.
"Jewellery can contain naturally formed gemstones or laboratory made gemstones, or even stones that are imitations of genuine gemstones", Ms Sylvan said.
"Gemstones can be treated to disguise imperfections and to enhance their appearance and artificial 'gemstones' may be treated to make them look more like their natural counterparts.
"The ACCC believes that consumers would have a reasonable expectation that any treatment of gemstones to enhance their aesthetic appearance and value would be disclosed.
"In particular, businesses which fail to disclose gemstone treatments, where the treated gemstones value is significantly less than the value of an equivalent untreated gemstone, may also risk contravening the misleading and deceptive conduct provisions of the Act.
"The ACCC is also particularly concerned by a reported upswing in what is called 'two price advertising' in the jewellery industry – for example, where a product is said to be 'valued' at a particular figure and is offered at a 'special' price. It is implied that consumers are making a price saving by paying less than they otherwise would, when this is not so.
"The ACCC believes that valuations referred to in comparative price advertising should reflect the 'worth' or normal price for the particular piece of jewellery in the market in which it is being sold – and not some inflated figure.
"Consumers should not be misled by jewellers using 'in house' jargon when presenting items for sale", Ms Sylvan said. "For example, jewellers understand that a 'Biron emerald' is laboratory emerald, whereas a consumer may assume it is a natural emerald from a place called Biron".
"Also discussed in the guide is the use of comparative price advertising, including 'was/now', strike-through price advertising and the use of valuations in the sale process.
"The ACCC material includes a checklist for advertisers and adhering to the guideline is the best way to protect a jewellery business and ensuring return custom.
"This guide has been developed in conjunction with the industry and the State and Territory fair trading agencies to benefit the consumers.
"Those who fail to comply with the law risk action being taken against them by the ACCC or fair trading agencies.
"The jewellery industry is on notice. The ACCC expects an overall improvement in advertising and selling practices and an end to misleading, deceptive and false practices.
Advertising and Promotion in the Jewellery Industry- a Guide to the Trade Practices Act is available from the ACCC in printed form and from the ACCC website.
*Ms Sylvan launched the publication at the Jewellery Industry Trade Fair, Darling Harbour, Sydney.