[Jewelry making - Article 00481] - Re: [Orchid] Sapphires buying

[Suzanne Wade]

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    Just thought I might take a moment to try and clarify what force of
    law the FTC "Guidelines" carry. 

    As I understand it from interviews with lawyers and FTC staff
    members, the FTC Guidelines are, indeed, just guidelines. You can't
    actually be prosecuted for violating the Guidelines. HOWEVER, there
    are laws against fraud, deceptive trade practices, misrepresentation
    of goods, etc., and you definitely can be prosecuted for these
    crimes.  Now, most judges are not experts in the gem and jewelry
    trades. Therefore, when presented with an charge of fraud, deceptive
    trade practices, etc., they look to see what trade practices are
    normally accepted -- and that means they look at the FTC Guidelines.
    If you are in obvious violation of the FTC Guidelines, you can pretty
    much count on the judge finding that you have engaged in whatever
    you have been charged with.  "But everybody does it!" isn't going to
    get you real far with a judge, especially since the prosecutor will
    promptly trot out the ethics guidelines of groups like the AGTA and
    AGS, as well as dealers that *don't* to prove that "everybody" does
    *not* do it. If you're the judge, who are you going to believe? 

    Now, odds are you won't face criminal prosecution unless you've set
    up a really good scam. Law enforcement agencies usually have more to
    do than worry if the consumers in their jurisdiction are being sold
    treated gems as natural -- especially when it comes to inexpensive
    stones such as topaz or citrine. However, civil lawsuits also usually
    rely on the FTC Guidelines to establish what accepted trade practices
    are, and you can be sued by both consumers and by competitors (under
    the Lanham Act, which in addition to protecting trademarks, also
    offers companies a way to sue competitors who engage in deceptive
    trade practices). 

    Anyway, that's how I undestand it: take it for what it's worth. 

Suzanne
Suzanne Wade
writer/editor
Suzanne AT rswade.net
Phone: (508) 339-7366
Fax: (520) 563-8255

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