WASHINGTON/LONDON (Reuters) – The U.S. Federal Trade Commission, which investigates allegations of deceptive advertising, has sent warning letters to eight companies to insist they distinguish in advertisements between diamonds from mines and those made in laboratories, it said on Tuesday.
The FTC said it had found instances where the eight companies advertised diamond jewelry “without clearly and conspicuously disclosing that the diamonds are laboratory-created,” according to the letter.
The agency declined to identify the recipients of the letters. An unredacted version of one of the letters seen by Reuters identified that recipient as Diamond Foundry, a California company that makes laboratory diamonds.
Diamond Foundry declined to discuss whether the letter would lead to changes in its marketing. “We pride ourselves on being a lab-grown diamond producer and this point of differentiation is what our success is built on,” CEO Martin Roscheisen said in an emailed statement.
Analysts say increased production of laboratory-grown diamonds has lowered their price. The Diamond Producers Association (DPA), which represents mining companies including De Beers, Rio Tinto and Alrosa, welcomed the FTC insistence that companies distinguish between mined diamonds and those made in laboratories.