National Advertising Division Recommends Diamond Foundry More Clearly Disclose Origin of its Laboratory-Grown Diamonds

NEW YORK, March 30, 2021 /PRNewswire/ -- The National Advertising Division (NAD) of BBB National Programs recommended that Diamond Foundry, Inc. modify its advertising by clearly and conspicuously disclosing the origin of Diamond Foundry's laboratory-grown diamonds (LGDs), which the company manufactures and retails directly to consumers through its subsidiary and e-commerce platform VRAI & Oro, LLC.

NAD recommended that Diamond Foundry discontinue the use of certain terms that could create confusion about the origin of these LGDs, modify certain website claims to more prominently disclose the man-made origin of its diamonds, and discontinue or modify certain social media claims that its LGDs are "real" diamonds.

The claims at issue were challenged by the Natural Diamond Council, an association of the world's leading diamond companies who represent approximately 75 percent of the world's rough diamond production. The challenged advertising appears on Diamond Foundry's and VRAI's websites and social media accounts, including in product descriptions at the point of sale.

Manufacturers of man-made diamonds such as Diamond Foundry rely on technological innovations which allow diamonds to be created in a laboratory rather than extracted from the earth. Diamond Foundry's technology replicates the environmental conditions necessary to create a diamond, starting with a thin slice of a diamond and adding carbon to a plasma reactor, resulting in a man-made diamond. Man-made Diamonds or LGDs have the exact same physical characteristics as mined diamonds due to their identical atomic composition and tetrahedrally-crystallized carbon structure. LGDs and mined diamonds are indistinguishable to the naked eye. 

NAD found that the advertiser's general brand messaging, for both the Diamond Foundry manufacturing brand and the VRAI retail brand, is replete with clear messaging as to the man-made nature of its diamonds and often plainly contrasts its products with mined diamonds. NAD noted, for example, that both the Diamond Foundry and VRAI websites and social media accounts prominently use the theme "Just Diamond. No Mining" and the Diamond Foundry website features readily accessible material describing its manufacturing process and distinguishing LGDs from mined diamonds.

However, in assessing the messages reasonably conveyed regarding the origins of Diamond Foundry's LGDs, NAD reviewed the challenged advertising as experienced by consumers, who may not be exposed to that general messaging.

The Natural Diamond Council challenged certain social media advertising in which Diamond Foundry-brand diamonds were advertised simply as "diamonds," without any accompanying description or disclosures identifying the diamonds as LGDs or otherwise indicating the man-made nature of the diamonds.

NAD determined that Diamond Foundry must, consistent with the Federal Trade Commission (FTC) Jewelry Guides, make an effective disclosure that its diamonds are man-made. NAD further found that, consistent with the FTC Jewelry Guides and the FTC Dot Com Disclosure publication, the advertiser should distinguish its LGDs from mined diamonds.

NAD recommended that Diamond Foundry modify its advertising to make these clear and conspicuous disclosures immediately preceding, with equal conspicuousness, the word "diamond."  

To avoid communicating a misleading message, NAD recommended that Diamond Foundry should also account for the fact that consumers may view and purchase its products while using mobile devices and that such disclosures should be typically visible on mobile devices without the need to scroll down to view them.

NAD also considered the terminology used by Diamond Foundry in its advertising to identify its products as LGDs. NAD determined that Diamond Foundry's use of the terms "created diamonds," "diamonds created aboveground," "sustainably created" or "sustainably grown," and "world positive," as they appear in the context of the challenged advertising do not sufficiently communicate that the diamonds are laboratory-grown and unmined. Therefore, consumers may be confused and not distinguish between the origins of Diamond Foundry's LGDs and competing mined diamonds. For this reason, NAD recommended that the claims be discontinued.

However, to the extent the Natural Diamond Council challenged Diamond Foundry's use of the term "created" where it is paired with "Diamond Foundry" as an identifier of the "creator," NAD determined that such use was not misleading. Further, NAD noted that nothing in its decision precludes Diamond Foundry from using the phrase "diamonds created aboveground" if it appears in a context where it is clear that the LGDs are man-made. NAD also noted that nothing in its decision precludes the advertiser from making more narrowly drawn and supported non-misleading claims using the phrase "world positive" if it is tied to a specific benefit or feature of Diamond Foundry's LGDs when accurately disclosing the diamonds' origin.

Regarding the advertiser's claims on its Diamond Foundry website, NAD had some concern that the plain header on the page that reads "Real" may lead to confusion as to the diamond's origins. To avoid conveying the misleading message that the LGDs are mined diamonds, NAD recommended that Diamond Foundry modify its claims on this page to more prominently disclose the man-made origin of its diamonds.

In addition, NAD recommended that the advertiser discontinue social media claims that its LGDs are "real" diamonds or modify the claims to make clear that its LGDs are not mined diamonds.  NAD found that, without context explaining that "real" diamonds are created in a laboratory and not mined, consumers may reasonably take away the unsupported message that Diamond Foundry's diamonds are mined diamonds.

In its advertiser statement, Diamond Foundry stated that it will comply with NAD's recommendations. Further, the advertiser thanked NAD "for their time and attention in providing industry regulation of advertising claims," but noted that it disagreed with certain aspects of NAD's decision.

All BBB National Programs case decisions can be found in its case decision library.  

About BBB National Programs: BBB National Programs is where businesses turn to enhance consumer trust and consumers are heard. The non-profit organization creates a fairer playing field for businesses and a better experience for consumers through the development and delivery of effective third-party accountability and dispute resolution programs. Embracing its role as an independent organization since the restructuring of the Council of Better Business Bureaus in June 2019, BBB National Programs today oversees more than a dozen leading national industry self-regulation programs, and continues to evolve its work and grow its impact by providing business guidance and fostering best practices in arenas such as advertising, child-directed marketing, and privacy. To learn more, visit bbbprograms.org

About the National Advertising Division: The National Advertising Division (NAD) of BBB National Programs provides independent self-regulation and dispute resolution services, guiding the truthfulness of advertising across the U.S. NAD reviews national advertising in all media and its decisions set consistent standards for advertising truth and accuracy, delivering meaningful protection to consumers and leveling the playing field for business.  

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