FTC Amends its Guides on Platinum/Base Metal Alloy Disclosure Requirements
The Federal Trade Commission has amended its Guides for the Jewelry, Precious Metals, and Pewter Industries, effective December 28, 2010, to provide guidance on how to mark and describe non-deceptively an alloy of platinum and non-precious metals, consisting of between 500 to 850 parts per thousand (ppt) pure platinum and less than 950 parts per thousand for platinum group metals (PGM)1.
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(In December 2004, Karat Platinum, a jewelry manufacturer, requested an FTC opinion on the application of the Platinum Section of the Jewelry, Precious Metals, and Pewter Industries Guides (“Jewelry Guides”) to a new product consisting of 585 ppt platinum and 415 ppt of non-precious metals. In 2008, FTC issued a notice soliciting comment on a proposed amendment to the Guide regarding the new products.)
FTC Can Take Action Against Industry Members Making Unfair or Deceptive Claims
The FTC is adding 16 CFR 23.0(d) and (e) to the Jewelry Guides. Paragraph (d) states that the Guides: (1) help marketers and other industry members avoid making claims that are unfair or deceptive under Section 5 of the FTC Act (15 USC 45); and (2) do not confer any rights on any person and do not operate to bind the FTC or the public. The FTC, however, may take action under the FTC Act if a marketer or other industry member makes a claim inconsistent with the Guides. In any such enforcement action, the FTC must prove that the challenged act or practice is unfair or deceptive in violation of Section 5 of the FTC Act.
Paragraph (e) states that the Guides consist of general principles, specific guidance on the use of particular claims for industry products, and examples. Claims may raise issues that are addressed by more than one example and in more than one section of the guides. The examples provide the FTC’s views on how reasonable consumers likely interpret certain claims. Industry members may use an alternative approach if the approach satisfies the requirements of Section 5 of the FTC Act. Whether a particular claim is deceptive will depend on the net impression of the advertisement, label, or other promotional material at issue. In addition, although many examples present specific claims and options for qualifying claims, the examples do not illustrate all permissible claims or qualifications under Section 5 of the FTC Act.
New Example of Misleading Markings for Platinum that Triggers Disclosure Statement
FTC is adding a new paragraph, 16 CFR 23.7(b)(4), to the examples of misleading markings or descriptions for platinum, to state that use of the word ‘‘Platinum,’’ or any abbreviation accompanied by a number or percentage indicating the ppt of pure Platinum contained in the product, to describe all or part of an industry product that contains between 500 ppt to 850 ppt, pure Platinum, and does not contain at least 950 ppt PGM (for example, “585 Plat.”) is misleading without a clear and conspicuous disclosure, immediately following the name or description of such product:
(i) of the full composition of the product (by name and not abbreviation) and percentage of each metal; and
(ii) that the product may not have the same attributes or properties as traditional platinum products. Provided, however, that the marketer need not make disclosure, if the marketer has competent and reliable scientific evidence that such product does not differ materially from any one product containing at least 850 ppt pure Platinum with respect to the following attributes or properties: durability, luster, density, scratch resistance, tarnish resistance, hypoallergenicity, ability to be resized or repaired, retention of precious metal over time, and any other attribute or property material to consumers.
(A note to paragraph (b)(4) is also being added to state that when using percentages to qualify platinum representations, marketers should convert the amount in parts per thousand to a percentage that is accurate to the first decimal place (e.g., 58.5% Platinum, 41.5% Cobalt).)
New Example of Markings/Descriptions Not Considered Unfair or Deceptive
FTC is also adding a new paragraph 16 CFR 23.7(c)(5) to the examples of markings and descriptions that are not considered unfair or deceptive, to state that an industry product consisting of between 500 ppt to 850 ppt pure Platinum and does not contain at least 950 ppt PGM, may be marked or stamped accurately, with a quality marking on the article, using parts per thousand and standard chemical abbreviations (e.g., 585 Pt., 415 Co.).
1Platinum group metals are platinum, iridium, palladium, ruthenium, rhodium, and osmium.
(See ITT’s Online Archives or 03/03/08 news, 08030399, for BP notice on FTC seeking comments on the proposed amendment of its Jewelry Guide on product marking.)
FTC Contact- Robin Spector (202) 326-3740