Posts Tagged ‘OFT’

OFT takes action against Cash for Gold companies

Back in January 2010, Gold-Traders reported that the Office of Fair Trading had launched an enquiry into the business practices of a number of online Cash for Gold companies.

Yesterday, the results for the enquiry were finally made public. As expected, the OFT have been highly critical over the way some of our competitors operate.

Three companies (CashMyGold, Cash4Gold and Postal Gold) have signed undertakings to improve their business practices. Two other companies who were also under investigation (CashYourGoldNow and Money4Gold) have since ceased trading.

The three companies named have undertaken to change a number of practices, including:

  • providing people with the option of receiving either a quotation for their gold which requires positive acceptance, or just a payment for their gold, and also displaying both options and the risks of each payment option clearly and prominently
  • providing consumers with clear information on other important features of the service, such as whether gemstones are purchased or returned and if the consumer sends a gemstone the risks of damage or loss
  • making clear, when referring to the ‘high price’ or ‘top price’ paid for gold, that the prices offered to consumers are based on the scrap or smelt value of gold.

Although the three companies named have all signed an undertaking to provide consumers with clear information on the prices offered for gold, we could only find this information on the CashMyGold web site. At the time of checking, they were offering £5.13 / gram for 9ct gold – that’s just 50% of market value, a very poor deal for the customer!

When calling Cash4Gold and Postal Gold, the company representatives refused to disclose what their current price per gram rates were.

Quite rightly the ‘Cash for Gold’ market has received some bad publicity recently. Unfortunately, there are many companies still trading who are out to make a fast buck and who give customers a very poor deal. Before selecting a company to sell your gold to, please make sure you can make and informed decision. You need to know what price per gram you’re being offered. You also need to know what will happen to the price offered if the gold market rates drop and you need to be aware of any hidden charges or fees you’ll be charged.

If you have any questions, or have gold to sell, give us a call. We have no hidden fees and our scrap gold prices are always available on this web site.

Link: OFT takes action against gold buying companies

February 15th, 2011 No Comments » Industry News |

Cash for Gold Companies Face OFT Enquiry

Today, the Office of Fair Trading has announced the launch of an investigation into online gold buying companies and whether they are complying with consumer protection legislation.

It appears the investigation has been instigated, following a Which? Money report that described a number of gold buyers as offering, “shockingly bad value”.

The OFT has also received a number of complaints in relation to the claims made on a number of web sites.

Juliet Young, a Director in the OFT’s Consumer Market Group is quoted as saying: “Buying gold using the postal service is a relatively new business model, and while innovation often brings benefits for consumers, we want to check that the market and businesses operating in it are developing in a way that treats customers fairly.”

Although the OFT doesn’t name the five companies under investigation, The Times reports that two of the companies are believed to be and One notable similarity between both these sites is that neither actually tells the customer up-front what they pay for scrap gold. Quite simply, you’re expected to send your valuables through the post without any indication of what you’re likely to be paid.

Would you be this trusting? I wouldn’t!

Personally, I am delighted this investigation has been announced. In the last 12-months, we have seen an explosion of ‘cash for gold’ web sites, along with TV, press and radio adverts. With some dealers offering as little as 20% of market value, consumers are too often being caught-out with slick advertising and carefully worded marketing slogans that claim a great deal, but fall woefully short.

Anyone with feedback relating to the use of a scrap gold service should contact the OFT. If you have a complaint or feel you have been misled, they (and we) also recommend you get advice from citizens advice and make a complaint via your local Trading Standards office.

January 21st, 2010 1 Comment » Miscellaneous |