Higher karatage is not necessarily better; pure gold is very flexible and yellow in colour, so mixing it with other materials strengthens the gold, making it more appropriate for use in jewelry pieces.
It's an illegal practice, but it happens. Unfortunately, the people who lose out are the customers who expect a certain quality level but are in reality getting much worse.
For instance, in Canada, the requirement for vermeil is only 1.0 micron thick. This is very thin plating, and you can expect that your jewelry won't last more than a couple of years with regular use.
National consumer protection agencies, such as the Federal Trade Commission in the US, regulate the label "vermeil" because it denotes a certain quality level.
In the realm of gold-tone jewelry, gold vermeil is the best quality jewelry you can get short of buying solid gold. For people who want a cheap, high quality alternative to solid gold, vermeil is your answer!
Note that in Canada, the requirements for labelling an item 'gold vermeil' are much lower; the plating thickness needs only to be 1.0 micron thick. If you are purchasing from a Canadian brand
Gold-plated jewelry refers to jewelry that has gold plating at least 0.5 microns thick. It does not require sterling silver to be used as the base material, and usually uses a less valuable material at its core. Since the plating is so thin, the gold colour will wear very quickly compared to gold vermeil. Gold vermeil is superior to gold-plated jewelry.