OFT cracks down on rogue cash for gold businesses

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Consumers suffering raw deals according to watchdog’s investigation.

An Office of Fair Trading investigation has prompted two companies that buy gold from the public by post to cease trading, while three others have agreed to change their business models.

CashYourGoldNow and Money4Gold shut down when the OFT investigated and challenged their business models.

CashMyGold, Cash4Gold and Postal Gold, have agreed to stop a practice where consumers who had sent in gold for valuation were locked into accepting the offer that had been made for their gold.

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In particular, the OFT was concerned with the business practice of sending consumers a payment, which if not rejected and returned within restrictive time periods, meant that their ‘silence’ was taken as consent to the payment and their gold was melted down.

Following the investigation and disclosure of advice by the OFT, CashMyGold, based in Manchester, Cash4Gold, based in west London, and Postal Gold, based in Douglas in the Isle of Man, all accepted they must change business 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 the prices offered for gold, including information on the weight and carat of the items assessed.
• 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.

Heather Clayton, senior director of the OFT’s Consumer Group said: “Any companies operating similar business models must make sure they treat consumers properly and provide clear information on how the service operates so that people make informed decisions about whether they wish to part with their possessions.”

 

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