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Sapphires buying


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 Wade
Phone: (508) 339-7366
Fax: (520) 563-8255