Consuming Issues: Dodge the gold jewellery rip-off
Saturday 23 January 2010
One of James Bond's most memorable foes was the gold smuggler Goldfinger. As well as his garish habit of painting women in gold, he wanted to detonate a nuclear bomb at the US gold reserve to increase the value of his insufficiently precious bullion. Thankfully, the fictional force of the British state defeated him, but 007's real-life counterparts at the Financial Services Authority were less effective in thwarting other would-be masters of the universe, bankers. The banking-inspired recession and consequent stock market crash have done for the price of gold what Auric Goldfinger intended at Fort Knox.
At the turn of the century, when talk of a new economic paradigm propelled the dotcom boom to absurd heights, out-of-fashion gold sank to £160 an ounce. Now it is a feisty £675.
As a consequence, a new gold rush is under way, characterised not by pioneers wielding pick axes but by colourful entrepreneurs running adverts offering "cash" to members of the public for unwanted jewellery.
People have long wondered whether these firms represent good value. An inspired experiment by the ever dependable Which? suggests (stifle your credulity) that they are not.
Uncommonly flash Which? researchers splashed cash on bling, nine-carat gold bracelets, bangles and necklaces from high street jewellers, then sent them off, undercover so to speak, to postal services such as www.money4gold.co.uk and www.cashmygold.co.uk.
For a bracelet costing £115 on the high street, the merchants offered anything from £6 to £39. For the £399 necklace, they graciously upped their bids to between £22 and £119.
Amusingly, after failing to make contact, Money4Gold claimed the £399 bracelet was "not gold" and could only be returned with a "shipping, handling and processing fee" of £10.95. CashMyGold offered £6.43 for the £115 bracelet; £9.64 for the £215 bangle; and £22.50 for the £399 necklace. Postal Gold and Cash4Gold (be forewarned) made similarly low offers.
Jewellery bound for the smelter will never match its shop price, but the postal gold merchants offered an average of just 6 per cent. CashMyGold explained it advertised for old or broken jewellery, saying: "Gold retail prices and the prices obtained for smelted gold are not comparable. Retail gold can be sold at a marked up price of up to 300 per cent."
Which? found better but still not great value elsewhere: pawnbrokers and independent jewellers offered £80 and £102 for the £399 necklace.
After publication of the survey this week, the Office of Fair Trading – an occasional Hercule Poirot but, in this case, an Inspector Clouseau – announced it would look into postal gold firms. 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 are developing in a way that treats customers fairly."
If only the OFT could mount a belated inquiry into the greatest gold heist of them all, carried out by Gordon Brown when Chancellor of the Exchequer. Between 1999 and 2002, he sold off half the UK's reserves, 395million tonnes of bullion, with the price at a 20-year low. At today's prices, taxpayers would make an extra £5bn: £96 for every adult in Britain.
Heroes & Villains
Hero: Peter Mandelson
In my column of 8 August, I vilified the Business Secretary for failing to welcome the Competition Commission's recommendation for a supermarket ombudsman to aid grocery suppliers. "Why do the words 'kicked into' and 'long grass' come to mind?" I wrote about his non-committal response. Earlier this month – five months later – the Department of Business announced it did want an ombudsman, but wasn't sure who should fill the post or what its powers would be, and announced a three-month consultation beginning on 4 February. Baron Mandelson, aka President of the Board of Trade, is due to make a decision in the, er, summer. I would like to apologise to him for any suggestion he was dragging his feet on the issue.
Villain: British Gas
January and still no sign of a cut in energy prices. Could it be suppliers are waiting until peak demand is over before reducing prices in the not-so-chilly spring? As Britain's biggest energy supplier, British Gas says it bought gas on long-term contracts more than a year ago and so cannot cut bills yet. Any of the Big Six could be in this slot this week. But, as British Gas will no doubt be telling customers facing disconnection, it's a hard world.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Simon Read: There may be trouble ahead for cohabiting couples who don’t make a will
10 tips for taking out a personal loan
Money Insider: Would £150 make you switch banks?
Why the City Watchdog is concerned with the credit card industry
Bargain Hunter: Find the deals that have real value beneath the Black Friday hype
- 1 'Kidnapped boy may have been abused and murdered by VIP paedophile ring,' say police
- 2 Ridley Scott on Exodus, Gods and Kings casting: 'I'm not going to get it financed if my lead actor is Mohammad so-and-so from such-and-such'
- 3 Girl, 7, gets Tesco to remove 'stupid' sign suggesting superheroes are 'for boys'
- 4 This letter from a reader explains why women can’t play football
- 5 'You should come to my house and eat cheeses with me': 4-year-old sends adorable love letter to girl at school
Ukip says babies born to immigrants in the UK should be classed as migrants – which would include Nigel Farage’s own children
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
Exclusive: UK approved £7m Israeli arms sales in six months before Gaza conflict
iJobs Money & Business
Negotiable: h2 Recruit Ltd: A rapidly expanding, global Software/ SaaS Vendor ...
£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...
£16000 - £18000 per annum: Langley James : IT Support; Helpdesk, VMware; Manch...
£35000 - £450000 per annum + £3k car, £70k ote: h2 Recruit Ltd: Do you want to...
Day In a Page
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens