Cash for Gold? OFT smell something fishy...

22 January 2010

I bet virtually no-one noticed the incredibly subtle punning in the headline of 'gold' and 'fish'. Those that did probably thought it was a rubbish pun. You can't win with you sneering gits.

Anyway, what's all this about golf and the Office of Fair Trading (OFT)?

It concerns those TV commercials you will have invariably seen that ask you to send in your unwanted gold in exchange for cash. The OFT have requested information from some of these companies because they have a hunch that they might not be complying with consumer protection legislation.

What the OFT are particularly interested in is their business practices and want them to explain some of the claims they've made in their advertising and on their websites. One thing that sticks out like a sore golden glans is whether consumers' rights to reject an offer for their gold and receive it back are being honoured.

The folks from The OFT have said: "No assumption should be made that any companies involved in gold buying have broken the law".

Juliet Young, a Director in the OFT's Consumer Market Group said: "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."

This move comes on the back of a Which? report which stated that these firms are offering terrible value. One firm offered a paltry £38.57 for the three pieces of new jewellery purchased for £729.

Which? found the TV gold buyers consistently offered the lowest prices, with CashMyGold offering just £38.57 for all three pieces of jewellery, including quoting just £9.64 for a 9 carat bangle that had been bought for £215, and for which an independent jeweller offered £54. In another case, Money4Gold told the Which? researcher that a £399 carat gold necklace was not gold and demanded they paid £10.95 to have it returned.

Basically, these new companies that are advertising on TV are making offers much lower than what is being offered by pawnbrokers and high street jewellers, who paid an average of 25% of the items' retail price.

Peter Vicary-Smith, Which? chief executive, said: “The poor value for money that these TV gold buyers are providing is simply shocking. The cash for gold market is unregulated, and this investigation has raised some serious concerns about the fair treatment of consumers. People should be wary of buyers’ adverts as they could almost certainly get more money for their gold elsewhere.”

[Telegraph]

TOPICS:   Consumer Advice

15 comments

  • Michael
    Anyway, what’s all this about golf and the Office of Fair Trading (OFT)?
  • Andre W.
    The problem with comparing new gold to what your offered in scrap is a huge difference considering new gold generally has a mark up of between 50-80% profit! Furthermore, I believe its even still unfair to compare it with an independent jewellers as they will want it to resell. Although eyes do need opening, but for pure scrap gold, ie broken, damaged, etc pieces of jewellery then this is the way to get money for your gold. Personally when I sold some I went up to Birmingham Jewellery Quarter as they directly deal with the scrapping of gold, whereas smaller jewellers will have to make a trip themselves or pay postage and thus want a cut for their middle man dealing.
  • Fella-Tio
    Cash for Cunts more like! like Andre says go to Birmingham! I recommend NEWEYS btw!
  • Gunn
    Fair point Andre but I'm not sure they are all advertising it that way.
  • Andre W.
    @ Gunn - Perhaps not, but in light of the above blog and the Which? survey comparasion. But also people sometimes cannot be bothered either and thus is their loss, a sad loss, but a loss nonetheless. @Fella-Tio - I cant remember what one we ended up selling it to, but we went round a few of them whilst looking at their very nice items, then went with the best quote we got and made a good day of it...furthermore it helped pay the rent/bills that month!
  • LanceVance
    They just need to change the name of the site to Notalotofmoney4gold.com. As has been said before, your a bit of a moron if you use these companies.
  • IDontSharePizza
    More worringly these companies are perfect for fencing stolen gold, i had a burglary a few month back and the only thing they were interested in was the gold, makes sense with the price of gold on the rise and an easy way to get rid of it,
  • Junkyard
    "The poor value for money that these TV gold buyers are providing is simply shocking." Value for money? You're not giving them money. Presumably they're providing poor value for gold.
  • Chris H.
    These companies value the gold based purely on its weight, no consideration is given to the items value as a piece of jewellery which may actually be higher. I think that's fairly obvious, but I suppose there are a few people out there that don't get it. I've no problem with the companies themselves, but I'm completely sick of seeing their adverts!
  • Sideysid
    @ LanceVance - indeed they are mostly morons who use these companies, but look at the target audience? Mostly daytime TV when ocean finance, yes car credit and no win no fee claims ads....and we all know the types who are very fond of their gold. Hmm maybe theres a connection somewhere...
  • Chris H.
    sorry, based purely on its weight and carat.
  • Martin
    And anyone is surprised that these companies don't offer the best prices? They are in it to make money after all and the best way to do that is to buy at the lowest possible price. Any mug stupid enough to send their elizabeth duke to one of these companies deserves all they get.
  • trish
    I think we all need to be cautious nowadays if we're going to choose to sell our gold or silver. There's way to many places doing it now and from what you read - they're mostly ripoffs! So - if you're going to sell your gold or silver, just do your homework and find a company that is reputable, honest, and will pay you fairly. If thru an online company - be sure they have their prices posted, pay for shipping, and that you can get your stuff back (not receive some check that's too late to reject the offer.) I recommend the Silver And Gold Exchange. http://SilverAndGoldExchange.com
  • John G.
    Hi, I found a local compay to me that seems ok. They offer a free visiting service although they do charge a small commission on any Gold purchased, but they were up front on this from the start. Their prices were high and as I understand linked to the London gold fix which comes out daily! Anyway I know ther are some dodgy dealers out there but take a look at;http://.topdogscrapgold.co.uk .
  • http://sellgoldnyc.areavoices.com/
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