When did the FTC outlaw ''Blue White'' diamond usage?

[Garry H (Cut Nut)]

I need to know for an article - anyone able to tell me?

 

[Garry H (Cut Nut)]

www.ftc.gov/bcp/guides/jewel-gd.shtm here is the link to the law


•§ 23.14 Misuse of the term "blue white.“

–It is unfair or deceptive to use the term "blue white" or any representation of similar meaning to describe any diamond that under normal, north daylight or its equivalent shows any color or any trace of any color other than blue or bluish.

 

[strmrdr]

1938 according to GIA

http://lgdl.gia.edu/pdfs/W97_fluoresce.pdf

page 4

"Often these diamonds were marketed
as “blue-white,” a term that was prohibited by
U.S. Trade Practice Rules in 1938 (U.S. Federal
Trade Commission, 193."

 

[strmrdr]

same source:
page 15
"U.S. Federal Trade Commission (193 Trade Practice Rules for
the Wholesale Jewelery Industry. Rule No. 6, p. 4, as promulgated
March 18, 1938."

 

[strmrdr]

By by 1939 one year after being put in charge of it they were went after several jewelers.
http://www.ftc.gov/os/annualreports/ar1939.pdf

Do a search for jewelry in the pdf to find the cases.

btw if you change the date in the link you can pull up every year back to 1938.

 

[strmrdr]

this is kinda neat because we talk about the legal use of wholesale jewelry.
In 1938 it was taken to court:

"L. & C. Mayers Co. Inc., New York.-The Second Circuit (New York), June 6, 1938,
in a unanimous decision, affirmed the Commission’s cease and desist order in this case
and directed enforcement thereof. The suit originated December 21, 1935, when this
company petitioned the Court to set aside the order, which was directed against alleged
misrepresentations to the effect that the company was a “wholesaler” of jewelry selling
directly to the purchasing public, with con-sequent saving of the usual retailer’s profit.
Pertinent excerpts from the opinion of the Court follow (97 F. (2d) 365):
The theory of the Commission’s complaint is that the company sells to ultimate
consumers; that in aid of such sales it uses catalogues designating itself as a wholesaler
and that the purchasing public regards it as such--one selling to retailers at a price
lower than the price at which the retailer sells; that consumers infer from this
representation that they are buying at the prices at which retailers purchase, thereby
saving an amount equal to the retailer’s profit, and that the prices as fixed in the
catalogues are wholesale prices; but such is not the fact and the consumer purchaser
is thereby deceived.
* * * * * * *
The evidence of experts as well as of other manufacturers and Jewelers justifies the
conclusion of the respondent [the Commission] that the petitioner was not a
wholesaler. Such false and misleading representations which have a tendency and
capacity to induce the purchase of petitioner’s products in preference to the products
of others (competitors) constitutes unfair competition within the meaning of Section
5 of the Federal Trade Commission Act.
* * * *"

 

[strmrdr]

This confirms that it was 1938 that they first extablished rules for diamond sales:
"During the fiscal year trade practice conference proceedings were before the
Commission in respect to a large number of industries. All received consideration and
the respective proceedings had advanced in the several procedural steps applicable in
the premises. Of these, proceedings in the following industries had reached the point
of final promulgation of rules by the Commission: (1) concrete burial vault
manufacturers; (2) rayon industry; (3) popular priced dress manufacturers; (4) toilet
brush manufacturers; (5) house dress and wash frock manufacturers; (6) metal clad
door and accessories manufacturers; (7) wholesale jewelry industry;"

page 115
http://www.ftc.gov/os/annualreports/ar1938.pdf

 

[strmrdr]

look what I found in 1940:
"Popular Publications, Inc New York.
Passing off imitation stones as precious stones : jewelry."

http://www.ftc.gov/os/annualreports/ar1940.pdf
page 65

 

[strmrdr]

wholesale claims rule upheald by the court again in 1942
"Caroline R. Macher and Robert J. Macher, trading as Macher Watch & Jewelry Co.
and Wholesale Watch & Jewelry Co., New York.--The Second Circuit (New York),
without dissent, affirmed the Commission order which proscribed what it found to be
false claims as to the respondents’ status as wholesalers of jewelry (126 F. 2d 420)."

http://www.ftc.gov/os/annualreports/ar1942.pdf
Page 70

This is kewl stuff!

 

[strmrdr]

http://www.ftc.gov/os/annualreports/ar1942.pdf

page 85 gives the exact date the rules were put into effect for the jewelry trade:

wholesale jewelry, March 18, 1938;

 

[Garry H (Cut Nut)]

Thanks Storm

BTW - that is a case about the wholesale - so a legal precedent, but there is no actual law is there?

 

[strmrdr]

Date: 5/7/2008 4:45:13 AM
Author: Garry H (Cut Nut)
Thanks Storm

BTW - that is a case about the wholesale - so a legal precedent, but there is no actual law is there?

It is a regulation not a law.
It has the same effect as a law however the primary difference is that it is enforced by the ftc rather than regular law enforcement and is usually tried in civil court.
However ftc regulations can be the basis of a fraud or deceptive practice criminal case.
Several states do have it as a law that applies to any seller of anything and it is a criminal matter in state court in some states.

 

[kcgunesq]

I read the reg as prohibiting the use of the term to describe yellow and near colorless as "blue white" unless they actually appear blue under midday natural light. I don''t read the rule as prohibiting the term when used to describe colorless diamonds with blue flouro.

I certainly haven''t dug into the issue any deeper than reading the excerpted portion. So maybe the reg has been expended through interpretation.

 

[strmrdr]

The regulation was written to cover exactly that situation.
The term blue/white was used at the time for a diamond with strong or very strong blue fluorescence that appeared blue in direct sunlight.
Under the ftc rules only an actual blue diamond could be called blue or blue/white.

Garry quoted the actual rule above which is writen in trade speak.

 

[kcgunesq]

It is unfair or deceptive to use the term "blue white" or any representation of similar meaning to describe any diamond that under normal, north daylight or its equivalent shows any color or any trace of any color other than blue or bluish.

But as a colorless diamond with strong blue flouro would not appear to have any color or trace of color other than blue, I don''t see how the term is prohibted when used to describe a colorless diamond having flouro sufficient to change its color to some shade of blue in natural mid-day sunlight.
You may be correct that the term is strictly prohibited for anything except a blue diamond. But I don''t read it that way. Furthermore, the inclusion of the word "white" in "blue-white" (the restricted term) wouldn''t make any sense if you are describing a blue diamond. It would simply be a blue diamond. At least this is how I interpret the language using ordinary English. I realize that other regs may define some words differently.


Derek A. Ward
Attorney and Commercial Real Estate Broker

 

[strmrdr]

hmmm in person I could show you why the wording works but not sure if I can describe it.
Basically you would see the white and north daylight as the trade describes it does not have as much uv as full sunlight, today UV is blocked by AGS and only a very small amount is allowed by GIA for diamond color grading.

 

[niceice]

Date: 5/8/2008 1:00:34 PM
Author: kcgunesq
It is unfair or deceptive to use the term ''blue white'' or any representation of similar meaning to describe any diamond that under normal, north daylight or its equivalent shows any color or any trace of any color other than blue or bluish.

But as a colorless diamond with strong blue flouro would not appear to have any color or trace of color other than blue, I don''t see how the term is prohibted when used to describe a colorless diamond having flouro sufficient to change its color to some shade of blue in natural mid-day sunlight.

You may be correct that the term is strictly prohibited for anything except a blue diamond. But I don''t read it that way. Furthermore, the inclusion of the word ''white'' in ''blue-white'' (the restricted term) wouldn''t make any sense if you are describing a blue diamond. It would simply be a blue diamond. At least this is how I interpret the language using ordinary English. I realize that other regs may define some words differently.

Derek A. Ward
Attorney and Commercial Real Estate Broker

I believe what Derek is saying is that his interpretation of the wording of the law in plain English is that it may not be illegal or prohibited to refer to a colorless diamond (DEF) that has a strong enough degree of fluorescence to make it appear "blue white" in color when viewed in direct sunlight as a "blue white diamond" because as a colorless diamond, it does not exhibit "any [other] color or any trace of any color other than blue or bluish" [as a result of the fluorescence]. However the term would not be appropriate for a diamond like the 1.70 carat, SI-1 clarity, H color with Very Strong Blue fluorescence that we currently have in inventory because although it exhibits a distinct yet subtle hint of lavender blue when viewed in direct sunlight (a very pretty effect, I might add) the diamond is also an "H" color and thus does exhibit a body color which is other than blue or bluish.

That said, I don''t think we''ll be marketing any colorless diamonds with blue fluorescence as "blue white" any time soon because it''s just asking for the FTC to wander in and deliver an @zz Whooping right before they make (whoever) the Poster Child for the 2009 I was Dumb Enough to Call it "Blue White" Award Conference

Keep in mind that one of the original reasons (read "the story I heard") for creating the guideline was that the demand for "blue white" diamonds had grown to the extent that jewelers were having trouble selling their non-blue fluorescent diamonds and had resorted to using blue light bulbs in their sales presentation to create the effect of a "blue white" diamond in a non-fluorescent diamonds to make it appear "blue white". I suppose that it''s kind of like rolling back the speedometer on a car, of course not all used car dealers resort to such tactics, but laws are created for the few who do in an effort to protect the masses from being defrauded.

 

[strmrdr]

hmm I think they could properly claim even a D colored diamond while called colorless has a color and nail someone with it.
I wouldnt want to be the one to find out!

 

[oldminer]

In theory, any tint or hint of color imparted to a diamond in the colorless series by fluorescence does not count as "the official color" of the diamond. The reality is that a beneficial color enhancement from fluorescence may make it into a legitimate sales pitch while any negative result of fluorescence won't be mentioned if at all possible.

With fancy colored diamonds one finds that fluorescence often imparts a beneficial component of color which is positive in the value of the stone so long as the transparency of the stone is not negatively affected.

The FTC "regulates" and just like other governmental and industry watchdogs it is hesitant to act unless the dollar amounts of potential damage are relatively very large. It takes tons of bureaucracy to pursue a firm and if the "crime" is relatively minor in value, like under $100,000, it is not likely you'll see much action from the Feds. Sometimes individual states act sooner on behalf of consumers.

There are many rules, but the ability or will to strongly enforce them is relatively weak. If the FTC was set up like the Philadelphia Parking Authority, there would be lots of fines and penalties and a lot more compliance. If you have seen the TV Show "Parking Wars" you'd know about our notorious parking authority. They are just about the only arm of our local government which acts as if there is a job to do 12 hours a day. We often are thankful that we don't get all the government we pay for.

 

[Garry H (Cut Nut)]

You get lots of blue in fluoro diamonds from North daylight where I live

 

[diagem]

Ever hear of the old term called "Premier" Diamonds?

 

[oldminer]

Near colorless, blue fluorescent rough initially came from the Premier mine in South Africa. From early in the 1900''s or before, depending on when the mine opened, and into the 1960''s and 1970''s we commonly used this term on certain stones to describe what they looked like. By the 1980''s the term was pretty much obsolete.

 

[Garry H (Cut Nut)]

I believe almost all the best blues came from there and it closed just recently

 

[Paul-Antwerp]

Most fluo stones, that we have cut recently, came from Argyle. Just on a side-note.

 

[diagem]

Date: 5/8/2008 6:29:20 PM
Author: oldminer
Near colorless, blue fluorescent rough initially came from the Premier mine in South Africa. From early in the 1900''s or before, depending on when the mine opened, and into the 1960''s and 1970''s we commonly used this term on certain stones to describe what they looked like. By the 1980''s the term was pretty much obsolete.

I remember Premier Diamonds used to fetch a premium also...

 

[diagem]

Date: 5/9/2008 4:15:10 AM
Author: Paul-Antwerp
Most fluo stones, that we have cut recently, came from Argyle. Just on a side-note.

On a side note.., I think Russian rough has the largest %''s of fluo. in their assortments these days...

 

[Garry H (Cut Nut)]

Paul wins. Non fluoro from Argyle is very rare. In all colours.

 

[Garry H (Cut Nut)]

Here is a question for all you experts:

What % of diamonds that have each of these fluoro grades are oliy or hazy?

Very Strong blue DG DA PfA Todd any one else Everyone else

Storng Blue DG DA PfA Todd any one else Everyone else

Medium Blue DG DA PfA Todd any one else Everyone else

Faint any color DG DA PfA Todd any one else Everyone else



And what % of oily hazy diamonds are non Fluoro?

If you want you can even say what non fluoro % is from twinned knatty effects

And what % is from graining


BTW i am not playing games with winners and loosers - opinions will be valued because there is no real data that I am aware of

 

[Paul-Antwerp]

I do not have sufficient data to even estimate.

From our production, I still need to see a Very Strong come out to be oily or hazy.

From the Strong''s that I see for sale on the Antwerp market, I see a lot of hazy stones. But I figure that this is because the big cutting-houses cannot sell these to their regular customers, and they try to offload them on the Antwerp inter-dealer market.

Live long,

 

[diagem]

Date: 5/9/2008 8:06:12 AM
Author: Garry H (Cut Nut)
Here is a question for all you experts:

What % of diamonds that have each of these fluoro grades are oliy or hazy?

Very Strong blue DG DA PfA Todd any one else Everyone else

Storng Blue DG DA PfA Todd any one else Everyone else

Medium Blue DG DA PfA Todd any one else Everyone else

Faint any color DG DA PfA Todd any one else Everyone else



And what % of oily hazy diamonds are non Fluoro?

If you want you can even say what non fluoro % is from twinned knatty effects

And what % is from graining


BTW i am not playing games with winners and loosers - opinions will be valued because there is no real data that I am aware of

What % of diamonds that have each of these fluoro grades are oliy or hazy? Based on my personal experience!!!

Very Strong blue DG less than 5-7% (in direct sunlight..., it would get up to maybe 20%)

Storng Blue DG less than 2% (in direct sunlight..., maybe up to 5-10%)

Medium Blue DG None (in direct sunlight..., maybe 5%)

Faint any color DG None-----none

And what % of oily hazy diamonds are non Fluoro? Much higher..., as oily and hazyness appear from to many factors..., clouds, graining, inclusions (knots and twinings)..., etc..etc...! Now..., if you consider low gem quality material (not including industrial material)..., I would dare throw a guess of 60% plus

If you want you can even say what non fluoro % is from twinned knatty effect

And what % is from graining Based on my experience..., if you consider the unaided eye appearance..., I have yet seen a Diamond of high quality that had internal graining appear oily or hazy..., I. graining will give a different appearance like a division of the material itself by showing lines (similar to internal graining in brown material)!

BTW i am not playing games with winners and loosers - opinions will be valued because there is no real data that I am aware of

HCA and Ideal-scope developer
www.ideal-scope.com