Julian Knight: Never mind the PR, postal gold is a mug's game

Now, 2010 may only be just over three weeks old, but there is already a frontrunner for The Independent on Sunday bare- faced-cheek-of-the-year award.

This dubious accolade looks like it's headed to Cash4Gold for its press release entitled "Which? Study finds Cash4Gold pays 60 per cent more than other mail-in gold buyers." Wow. 60 per cent and the Which? seal of approval – something to shout about.

Here, though, is the real story. Which? mystery-shopped the gold buying firms – often seen in daytime-TV ads. It sent three pieces of new gold jewellery to each of four mail-in gold buyers, three independent jewellers and three pawnbrokers. The results should give anyone thinking of using the mail-in gold firms pause for thought.

The consumer group said CashMyGold offered the lowest prices – just £38.57 for three pieces purchased for £729. In one case, CashMyGold offered just under £10 for a £215, 9ct bangle, while an independent jeweller quoted £54. The generous souls at Cash4Gold quoted £14.57 for the same bangle. That is indeed around 60 per cent more than the other firms, but it's only a fraction of what you could get down the road at an independent jeweller. Such firms argue that the values they give are based on the melted value of the gold rather than the resale potential of the jewellery. However, the Office of Fair Trading is to investigate several of the firms (it would be good if the OFT for a change actually named them) and is to invite users of mail-in gold firms to let it know when they feel short-changed – the OFT may be quite busy

Perhaps Cash4Gold sees its press release as positive spin, but it wouldn't fool a five-year-old. My advice would be to keep schtum rather than crowing about how it is the best of what looks like a very bad bunch.

Mutual understanding

There is real anger over Skipton Building Society's decision to raise its standard variable rate (SVR) for mortgage customers. Rates will jump from 3.5 per cent to 4.95 per cent, breaking an agreement that the society has with its borrowers that its SVR will not exceed the Bank of England base rate by more than 3 per cent.

The Skipton has done this by enacting an "exceptional circumstances" clause in its mortgage contract, with its chief, David Cutter, saying it could not keep the SVR at 3.5 per cent and still pay enough to savers to attract sufficient deposits. This is part of a trend we've been following for months; banks that couldn't care less about savers' cash in the boom years are now competing hard for deposits and, in the process, squeezing small and medium-size building societies.

I'll harrumph at any financial institution, but many building societies are in a tough place – definitely, in my view, "exceptional circumstances". It's deeply ironic that the banks that caused this mess could pick up lots of business from the mutuals – which, while not blameless, are worth preserving.

As for Skipton's borrowers, yes, look at remortgaging away – rates are more likely to rise later this year due to worrying signs of inflation (see page 89). But bear in mind that even at the new higher rate, it's still only around the industry average, and is 1.3 percentage points below the most expensive, from the Chesham Building Society.