American Cash for Gold companies face new legislation

While the Office of Fair Trading (OFT) continue to investigate the business practices of five unamed cash for gold companies in the UK, it is interesting to note that the US Federal Trade Commission (FTC) are looking to introduce new legislation to regulate the online gold buying industry in America.

In the USA, most cash for gold companies operate in a similar fashion to the companies you see advertising on UK television screens. There’s no indication given of what your gold is worth BEFORE you send it off and once you find out what the company is paying you, it can be difficult (sometimes impossible) to reject the offer.

Under new legislation proposed by Representative Anthony Weiner of New York in January 2010,  the US online gold buying industry could see some major restructuring to resolve this and other issues. The proposed legislation is called the Fair Deal Act and its main component is the institution of a policy where sellers would have the opportunity to review the offers made by gold buyers before agreeing to the price. Included in this legislation is the provision that the gold buyer must also insure the packages when returning items when the offer was rejected.

Whilst no similar legislation will be introduced in the UK following the OFT investigation, it underlines the need for consumers to do their research and make sure they’re making an informed decision, prior to sending off their gold.

1. No matter what the marketing hype states, if a cash for gold company doesn’t quote their genuine (not estimated) scrap gold prices, DO NOT deal with them.
2. Check the company’s small print. Are there any hidden fees? Are their quoted prices for hallmarked and non-hallmarked gold?
3. Are the quoted prices guaranteed? What happens if the gold market drops while your package is in transit?
4. If you change your mind, does the company offer a quick and simple return policy?

Gold-Traders (UK) Ltd offers an ethical cash for gold service to customers in the UK. We publish our scrap gold prices and update them on a regular basis.

To value your unwanted gold, use our calculator in the right-hand column of this page to select the purity (carat) and the weight (in grams).