12.08.10

Washington, DC – Today, The House of Representatives passed the Guarantee of a Legitimate Deal (GOLD) Act, a bill sponsored by Rep. Anthony Weiner (D – Queens and Brooklyn), a member of the House Subcommittee on Commerce, Trade and Consumer Protection, that will crack down on gold-buying companies like Cash4Gold that cheat customers through deceptive marketing, misleading return policies and low-ball payments.

Earlier this year, with slick Cash4Gold TV commercials dominating the airwaves and telling consumers they can make a quick buck by selling their unwanted jewelry, Rep. Weiner called on the Federal Trade Commission to investigate the company, and introduced the GOLD Act after receiving numerous complaints from exploited customers.

“Cash4Gold has used these bad economic times as a golden opportunity to fleece hard working people in need of an extra dollar,” Weiner said. “The passage of this bill is an important step towards giving consumers who want to sell their gold the protections they need.”

“The GOLD Act, introduced by Rep. Anthony Weiner, creates much fairer rules of the road for online cash-for-metals transactions,” said Chuck Bell, Programs Director of Consumers Union, publisher of Consumer Reports. “This bill will give consumers who do decide to use online cash-for-metal services a fair opportunity to negotiate a better offer, and to promptly obtain the safe return of their gold or precious metal, with appropriate insurance, if they decline that offer. We are very pleased the House of Representatives has now approved this bill to improve consumer protections, and we urge its swift approval by the Senate.”

The GOLD Act, which passed the House by a vote of 324-81, would: 1) require a seller’s acceptance of an offer before the transaction is complete, 2) issue fines to companies that melt down a consumer’s gold before an offer is accepted; and 3) mandate that companies ensure returned jewelry is insured with the mail delivery company at the same monetary value as the consumer originally insured it.

Working with Consumer Reports, Weiner’s office found the following:

Consumers Receive a Pittance for their Pendants Cash4Gold and similar companies paid between 11% - 29% of the day's market price for gold, while pawn shops paid about 35% - 70%. According to Consumerist.com, gold purchasing companies intentionally low-ball offers to customers and then, if a customer complains, increase subsequent offers by claiming they reassessed the value of the submitted item. Customer service agents are reported to receive a commission for keeping the pay-out low.

Act Fast or Lose Your Watch Cash4Gold advertises that consumers have 12 days to return the company’s check if the consumer does not want to sell their jewelry. However, in practice, Cash4Gold requires consumers to return the check within 12 days of it being issued, regardless of if the consumer receives the check a few days or a even a week later.

This will often leave customers with only a few days to decline the offer from Cash4Gold, while still under the assumption that they have a full 12 days. Additionally Cash4Gold will only insure your returned item through postal mail up to the value that they appraised it for. This is often only a tenth of the actual value, and less than the customer insured it for when they mailed it in.

Cash4Gold Keeps Jewelry Despite Customer Asking For a Return Consumerist.com also reported complaints that some customers who refuse the Cash4Gold offer within the accepted return period are told that their item has already been melted down and that the item cannot be returned.

Numerous customers have complained online and to the post office that Cash4Gold claims that the customers’ gold was “lost in the mail.” USPS has conducted internal investigations and according to the Postal Inspectors office, they found that Cash4Gold had in fact lost the items.

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