Ad Council in the U.S. demands Natural Diamond Council to eliminate certain advertising claims

The National Advertising Division (NAD) of BBB National Programs recommended that the Natural Diamond Council discontinue certain advertising claims comparing mined diamonds with man-made diamonds, including the carbon emissions associated with diamond mining compared with diamond manufacturing, the scarcity of mined diamonds, the resale value of mined diamonds versus man-made diamonds, as well as claims that described mined diamonds as "real", in contrast to man-made diamonds.

The claims at issue, which appeared on the Natural Diamond Council's website and in marketing assets that the advertiser makes available to retailers, were challenged by Diamond Foundry, Inc., a manufacturer of laboratory-grown diamonds (LGDs).

The mined diamonds recovered and sold by Natural Diamond Council members are found in some of the most remote places on the planet and require significant investment and technical expertise to locate and recover. In recent years, man-made diamonds have entered the marketplace to compete with mined diamonds. 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 challenged claims made by the Natural Diamond Council that carbon emissions associated with LGDs are three times greater than those associated with mined diamonds. NAD determined that the advertiser's evidence was not sufficiently reliable to support its comparative carbon emissions claims. Further, NAD was concerned that such claims conveyed a broader implied message about the overall environmental benefits of mined diamonds versus man-made diamonds, a message that was not supported.

Therefore, NAD recommended that the advertiser discontinue the implied claim that mined diamonds are better for the environment than man-made diamonds, and express claims that:

• "… recent third-party research reveals that natural diamonds produce 3X less carbon emissions per carat than lab-grown diamonds, equal only to the carbon emissions required to produce 3 iPhones . . . ."
• "Estimated carbon emissions of laboratory created diamonds is 3 times more than natural diamonds."
• "While 'modern diamond miners produce 160 KG of carbon emissions per carat of polished diamond,' man-made diamonds produce 511 KG of carbon emissions per carat of polished diamond."

Further, NAD determined that claims in the Natural Diamond Council's online advertising which emphasize the increasing scarcity of natural diamonds create a sense of urgency about the supply of natural diamonds that is not supported by the evidence. NAD noted that while it may be likely that supply issues will someday influence the consumer market for natural diamonds, the challenged advertising reasonably conveys a message that consumers might become "priced out" of the diamond market and unable to purchase natural diamonds in the future, and that they must therefore act now.

Because NAD concluded that the Natural Diamond Council did not have a reasonable basis for claims that diamonds are increasing in scarcity, it recommended that the advertiser discontinue claims that:

• "…full carat and larger natural diamonds are becoming rarer by the day as supply continues to decrease and no significant deposits have been found in decades."
• "Natural diamonds are finite and rare. The number of recovered diamonds peaked in 2005 and will decrease significantly over the next decade. Diamonds are becoming rarer every day because no new discoveries have been made in about 30 years."

NAD noted that nothing in its decision precludes the advertiser from making truthful and non-misleading claims about the global supply of natural diamonds, including their relative availability.

Diamond Foundry also challenged the advertiser's claims relating to the resale value of mined diamonds versus the resale value of LGDs.

NAD noted that while it is not misleading for the Natural Diamond Council to generally refer to mined diamonds as deriving value because they are "rare" or "unique," the advertiser's references to "resale" value reasonably convey an unsupported message about the resale value of man-made diamonds. NAD determined that the Natural Diamond Council may claim that "Natural diamonds obtain their value from their uniqueness and rarity as billion-year-old precious gems older than life itself," provided such claim is not connected to a message about resale value of man-made diamonds. 

However, NAD recommended that the advertiser discontinue implied claims that mined diamonds are more financially valuable than man-made diamonds because they are rare and old, and express claims that:

• "Lab-grown diamonds are currently sold at a slightly reduced price compared to natural diamonds, but the cost continues to decline due to mass production. Therefore, they have little to no resale value."
• "A laboratory created diamond has no resale value and its price is falling rapidly."
• "
• M
ass-produced lab-grown diamonds are sold at comparable prices, but have little to no resale value because they can be endlessly replicated."

Finally, NAD determined that, in the context in which it appeared, the advertiser's use of the word "real" to describe its diamonds reasonably conveys the unsupported message that LGDs, like Diamond Foundry's, have different physical and chemical properties than mined diamonds. LGDs have the exact same physical characteristics as mined diamonds due to their identical atomic composition and tetrahedrally-crystallized carbon structure. NAD was concerned that in the context of the challenged advertising, consumers may incorrectly conflate LGDs such as Diamond Foundry's with imitation diamonds like moissanite and cubic zirconia, which do not share the same physical properties as mined diamonds.

Therefore, NAD recommended that the Natural Diamond Council discontinue the implied claim that man-made diamonds are not "real" diamonds, and express claims that:

• "Today, there are many laboratory-grown and synthetic diamonds on the market. These are also made of carbon, but without the Earthly origins of real diamonds, they lack the unique qualities infused by nature."
• "The difference between a real diamond and a lab-grown diamond is simple . . . A real diamond is unique and rare, formed one hundred miles below earth's surface up to 3 billion years ago. Real diamonds undergo extraordinary environmental circumstances, bursting towards the earth's surface through volcanic eruptions. They are miracles of nature."

In its advertiser statement, the Natural Diamond Council stated that it "agrees to comply with the NAD's recommendations." Further, the advertiser stated that it is "grateful for the NAD's constructive feedback about its substantiation and will incorporate NAD's suggestions as it collects additional data to support its advertising claims."