Sidebar: The FTC Issues Standards for Ethical Practices

In 1914 the US Congress created the Federal Trade Commission (FTC) to protect American consumers from unlawful business practices. Since then the FTC has been active in four main areas:

  • Monitoring business activity to assure that businesses comply with existing federal trade laws
  • Providing Congress with information relevant to pending legislation
  • Assisting the US Department of Justice in enforcing federal laws that deal with monopolies and trade restrictions
  • Enforcing legislation that prohibits illegal or deceptive trade ­practices

Over the years the FTC has published guidelines affecting a range of consumer products, including jewelry. Although the FTC’s jurisdiction is limited, its recommendations and trade practice rules are the basis for many state and local laws as well as standards for ethical business behavior. Also, in the absence of existing law, the US courts tend to rely on them when settling legal disputes.

In 1957 the FTC published Trade Practice Rules for the Jewelry Industry, which dealt with many areas of gem and jewelry merchandising. The rules have been revised three times since then, most recently in 2010. The FTC worked closely with professional jewelers’ groups to shape the current set of policies, which are now called Guides for the JewelryPrecious Metals and Pewter Industries.

The Guides, of course, only apply to the US. Other nations have their own standards. If you trade in a country with its own standards in place, it’s your responsibility to become familiar with them. There are both legal and ethical consequences if you don’t. Not following them can adversely affect your reputation and hurt your business.