The buyers should research better before they buy too. The whole "buyer Beware" routine.
That said... it's FRAUD. If they sold a necklace as 18karat gold and it was base metal with glitter on it they'd be JUST as liable.
I'd believe that they think YOU are wrong, since the supplier probaly told them they were het for spider, and they'll believe the "bigger" guy(supplier wise). Just to give them benefit of a doubt.
Still doesn't mean it's not FRAUD. Illegil. No good. I'd call up the police department and ask them what you could do about it, other than calling the BBB.
(I actually was thinking.. why would HE try to say there's "het for spider"? He's always so sensable!!.. when I saw the title of the thread! Sorry! I should have known better!)

Wolfy