§ 66-74. What constitutes unfair trade practice. - North Carolina Statutes

§66‑74.  What constitutes unfair trade practice.

It is an unfair trade practicefor any member of the diamond industry:

(1)        To use, or cause orpromote the use of, any trade promotional literature, advertising matter,guarantee, warranty, mark, brand, label, trade name, picture, design or device,designation, or other type of oral or written representation, howeverdisseminated or published, which has the capacity and tendency or effect ofmisleading or deceiving purchasers or prospective purchasers with respect tothe type, kind, grade, quality, color, cut, quantity, size, weight, nature,substance, durability, serviceability, origin, preparation, production,manufacture, distribution, or customary or regular price, of any diamond orother product of the industry, or which has the capacity and tendency or effectof misleading or deceiving the purchasing or consuming public in any othermaterial respect.

(2)        In the sale,offering for sale, or distribution of products of the industry to use theunqualified word "diamond" as descriptive of or as an identificationfor any object or product not meeting the requirement specified in thedefinition of diamond hereinabove set forth, or which, though meeting suchrequirements, has not been symmetrically fashioned with at least 17 polishedfacets.

Theforegoing provisions of subdivision (2) have application to the unqualified useof the word "diamond." They are not to be construed as inhibiting:

a.         The use of the words"rough diamond" as descriptive of or as a designation for, uncut orunfaceted objects or products meeting the requirements specified in thementioned definition of diamond; or

b.         The use of the word"diamond" as descriptive of or as a designation for objects orproducts meeting the requirements of said definition of diamond, but which havenot been symmetrically fashioned with at least 17 polished facets when inimmediate conjunction with the word "diamond," there is either adisclosure of the number of facets and shape of the diamond or the name of atype of diamond which denotes shape and which usually has less than 17 facets(e.g., "rose diamond"); or

c.         The use of the words"imitation diamond" as descriptive of or as a designation for objectsor products which do not meet the requirements of said definition of diamondbut have an appearance similar to that of a cut and polished diamond.

Whenthe word "diamond" is so used, the qualifying word or words shall beof at least equal conspicuousness as the word "diamond."

(3)        To use the words"reproduction," "replica," "diamond‑like,"or similar terms as descriptive of imitation diamonds.

(4)        To use the term"synthetic diamond" as descriptive of any object or product unlesssuch object or product has in fact been artificially created and is of similarappearance and of essentially the same optical and physical properties andchemical structure as a diamond, or to apply the term "diamond" toany man‑made objects or products unless it is immediately preceded ineach instance with equal conspicuity by the word "synthetic."

(5)        To use the word"perfect" or any other word, expression or representation of similarimport, as descriptive of any diamond which discloses flaws, cracks, carbonspots, clouds, or other blemishes or imperfection of any sort when examined innormal daylight, or its equivalent, by a trained eye under a 10‑powercorrected diamond eye loupe or other equal magnifier.

Theuse with respect to a stone which is not perfect of any phase (such as"commercially perfect") containing the word "perfect" or"perfectly" is regarded as misleading and in violation of thissubdivision, and this subdivision shall not be construed as approving of theuse of the word "perfect," or any word or representation of likeimport, as descriptive of any diamond that is of inferior color or make.Nothing is to be construed as inhibiting the use of the word"flawless"  as descriptive of a diamond which meets the requirementsfor "perfect" set forth in this subdivision.

(6)        In connection withthe offering of any ring or rings or other articles of jewelry having a perfectcenter stone or stones, and side or supplementary stones which are not of suchquality, to use the word "perfect" without clearly disclosing thatsuch description applies only to the center stone or center stones.

(7)        To use the term"blue white" or any other term, expression or representation ofsimilar import as descriptive of any diamond which under normal, north daylightor its equivalent, shows any color or any trace of any color, other than blueor bluish.

(8)        To advertise, offerfor sale, or sell any diamond which has been artificially colored or tinted bycoating, irradiating, or heating, or by use of nuclear bombardment, or by anyother means, without disclosure of such fact to purchasers or prospective purchasers,or without disclosure that such artificial coloring or tinting is notpermanent, if such is the fact.

(9)        To use the terms"properly cut," "proper cut," "modern cut," "well made," or expressions of similar import, to describe anydiamond that is lopsided or so thick or so thin in depth  as materially todetract from the brilliance of the stone.

(10)      To use theunqualified expressions "brilliant," or "brilliant cut," or"full cut" to describe, identify or refer to any diamond except around diamond which has at least 32 facets, plus the table above the girdle andat least 24 facets below.

Suchterms should not be applied to single or rose‑cut diamonds, either withor without qualification. They may be applied to emerald (rectangular) cut andmarquise (pointed oval) cut diamonds meeting the above stated facetrequirements when, in immediate conjunction with the term used, disclosure ismade of the fact that the diamond is of emerald or marquise form.

(11)      To use the terms"clean," "eye clean," "commercially clean,""commercially white," or any other terms, expressions, orrepresentations of similar import in advertising, labeling, representing, ordescribing any diamond when such terms are used for the purpose, or with thecapacity and tendency or effect, of misleading or deceiving purchasers,prospective purchasers, or the consuming public.

(12)      To misrepresent theweight of any diamond or to deceive purchasers or prospective purchasers as tothe weight of any diamond.

Thestandard unit for designation of the weight of a diamond is the carat, which isequivalent to 200 milligrams (one‑fifth gram). While advertisements maystate the approximate weight or range of weights of a group of products, allweight representations regarding individual products shall state the exactweight of the stone or stones and be accurate to within 1/200th of a carat (one‑half"point").

(13)      To state or otherwiserepresent the weight of all diamonds contained in a ring or other article ofjewelry unless such weight figure is accompanied with equal conspicuity by thewords "total weight" or words of similar import, so as to indicateclearly that the weight shown is that of all stones in the article and not thatof the center or largest stone.

(14)      To use the word"gem" to describe, identify or refer to any diamond which does notpossess the requisite beauty, brilliance, value and other qualities necessaryfor classification as a gem.

Notall diamonds are gems. For example: Small pieces of diamond rough or meleeweighing only one or two points are not to be described as "gems."Neither should stones which are grossly imperfect or of decidedly poor color beso classified unless they are of such a size as to be rare and desirable andvaluable for that reason.

Noimitation diamond can be described as a gem under any circumstances.

(15)      In connection withthe offering for sale, sale, or distribution of diamonds or articles set withdiamonds, to use as part of any advertisement, label, packaging material, orother sales promotion literature, any illustration, picture, diagram or otherdepiction which either alone or in conjunction with accompanying words orphrases has the capacity and tendency or effect of misleading or deceivingpurchasers or prospective purchasers concerning the type, kind, grade, color,cut, quality, size, weight, or character of any diamond, or which has thecapacity and tendency or effect of misleading the purchasing or consumingpublic in any other material respect.

(16)      To use as part of anyadvertisement, label, packaging material, or other sales promotion literature,any illustration which exaggerates the size of a diamond inset or enlarges itout of proper proportion to the mounting, without clearly and conspicuouslystating either the amount that the diamond has been enlarged in theillustration, or that the diamond in the illustration has been "enlargedto show detail."

(17)      To represent,directly or indirectly, through the use of any statement or representation inadvertising or through the use of any word or term in a corporate or tradename, or otherwise, that said member is a producer, cutter, or importer ofdiamonds, or owns or controls a cutting plant, or has connections abroad,through which importations of rough or cut stones are secured, or maintainsoffices abroad, when such is not the fact, or in any other manner tomisrepresent the character, extent, volume, or type of business beingconducted.

(18)      To publish orcirculate false or misleading price quotations, price lists, terms orconditions of sale or reports as to production or sales which have the capacityand tendency or effect of misleading purchasers, prospective purchasers, or theconsuming public, or to advertise, sell or offer to sell diamonds or articlesset with diamonds at prices purporting to be reduced from what are, in fact,fictitious or exaggerated manufacturer's or distributor's suggested retailselling price, or that contains what purport to be bona fide price quotationswhich are in fact higher than the prices at which such products are regularlyand customarily sold in bona fide retail transactions. It is likewise an unfairtrade practice to distribute, sell or offer for sale to the consuming public insuch manner diamonds or articles set with diamonds bearing such false,fictitious, or exaggerated price tags or labels.

(19)      To offer for sale,sell, advertise, describe, or otherwise represent diamonds or diamond‑setmerchandise as "close‑outs," "discontinued lines," or"special bargains," by use of such terms or by words orrepresentations of similar import, when such is not true in fact; or to offerfor sale, sell, advertise, describe or otherwise represent such articles wherethe capacity and tendency or effect thereof is to lead the purchasing orconsuming public to believe the same are being offered for sale or sold atgreatly reduced prices, or at so‑called "bargain" prices whensuch is not the fact.

(20)      To advertise aparticular style or type of product for sale when purchasers or prospectivepurchasers responding to such advertisement cannot readily purchase theadvertised style or type of product from the industry member and the purpose ofthe advertisement is to obtain prospects for the sale of a different style ortype of product than that advertised.

(21)      To use sale practicesor methods which:

a.         Deprive prospectivecustomers of a fair opportunity to purchase any advertised style or type ofproduct; or

b.         To falsely disparageany advertised style or type of product or, without the knowledge of thecustomer, to substitute other styles or types of products which the advertiserintends to sell instead of the advertised style or type of product.

(22)      To advertise or offerfor sale a grossly inadequate supply of products at reduced or bargain priceswithout disclosure of the inadequacy of the supply available at such priceswhen such advertisement or offer has the capacity and tendency or effect ofmisleading or deceiving purchasers or prospective purchasers.

(23)      To describe, identifyor refer to a diamond as "certified," or to use respecting it anyother word or words of similar meaning or import unless:

a.         The identity of thecertifier and the specific matters or qualities certified are clearly disclosedin conjunction therewith; and

b.         The certifier hasexamined such diamond, has made such certification and is qualified to certifyas to such matters and qualities; and

c.         There is furnishedthe purchaser a certificate setting forth clearly and nondeceptively the nameof the certifier and the matters and qualities certified.

(24)      To aid, abet, coerceor induce another, directly or indirectly, to use or promote the use of anyunfair trade practice specified in this Article. (1957, c. 585, s. 2.)