Gold-buying companies told to polish up their act

Two companies that offered to buy gold jewellery through the post have stopped trading following an Office of Fair trading inquiry, while a further three have been forced to improve the way they treat customers.

The OFT said Money4Gold had ceased trading and was now in voluntary liquidation after it consulted the firm, based in St Albans, Hertfordshire, about improving its practices.

Three others – CashMyGold, Cash4Gold and Postal Gold – have agreed to change their behaviour after the watchdog took enforcement action following a year-long investigation. A fifth business, CashYourGoldNow, also signed undertakings but informed the OFT that it would cease trading in the UK gold market.

The investigation dates back to January last year, when the OFT requested information from gold-buying companies after it received complaints from consumers.

The watchdog raised concern about the practice of sending out payments for gold, which, if not turned down by the customer and returned within what the OFT termed "restrictive time period", was taken as consent. This meant a customer would sometimes end up locked into accepting the offer and their gold was melted down.

Following the investigation,CashMyGold, Cash4Gold and Postal Gold have agreed to give customers the option of receiving either a quote which requires positive acceptance, or just a payment, and to clearly and prominently display both options and the associated risks. They also agreed to give customers clear information about the gold prices offered, including details of the weight and carat of the items assessed; clear information about whether gemstones were purchased or returned, the risks associated with sending in gemstones; and to clarify that the high or top price paid was based on the scrap or smelt value of gold. Other undertakings include refraining from making claims about being "the UK's No 1 gold buyer" when that was not the case.

Heather Clayton, a senior director in the OFT's consumer group, said it was important to have consumer protections in place. "These days we see more and more new business models which involve consumers distance selling goods to firms. These options are good for consumers, providing business practices are fair," she said.

"Where we see problems, however, we are keen to intervene early so that these markets develop with an appropriate level of consumer protection.

"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."

Gold-buying firms have become much more prominent in recent years, with many advertising on television or appearing on temporary stands in shopping centres.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Guru Careers: Graduate Editor / Editorial Assistant

£16 - 20k: Guru Careers: A Graduate Editor / Editorial Assistant is needed to ...

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Day In a Page

Raif Badawi: Wife pleads for fresh EU help as Saudi blogger's health worsens

Please save my husband

As the health of blogger Raif Badawi worsens in prison, his wife urges EU governments to put pressure on the Saudi Arabian royal family to allow her husband to join his family in Canada
Birthplace of Arab Spring in turmoil as angry Tunisians stage massive sit-in over lack of development

They shall not be moved: jobless protesters bring Tunisia to a halt

A former North African boom town is wasting away while its unemployed citizens stick steadfastly to their sit-in
David Hasselhoff's new show 'Hoff the Record': What's it like working with a superstar?

Hanging with the Hoff

Working with David Hasselhoff on his new TV series was an education for Ella Smith
Can Dubai's Design District 'hipster village' attract the right type of goatee-wearing individualist?

Hipsters of Arabia

Can Dubai’s ‘creative village’ attract the right type of goatee-wearing individualist?
The cult of Roger Federer: What is it that inspires such obsessive devotion?

The cult of Roger Federer

What is it that inspires such obsessive devotion?
Kuala Lumpur's street food: Not a 'scene', more a way of life

Malaysian munchies

With new flights, the amazing street food of Kuala Lumpur just got more accessible
10 best festival beauty

Mud guards: 10 best festival beauty

Whether you're off to the Isle of Wight, Glastonbury or a local music event, we've found the products to help you
Unai Emery’s passion for winning and eye for a bargain keep Seville centre stage in Europe

A Different League

Unai Emery’s passion for winning and eye for a bargain keep Seville centre stage in Europe, says Pete Jenson
Amir Khan and James DeGale’s remarkable Olympic performances were just the start of an extraordinary journey - Steve Bunce

Steve Bunce on Boxing

Amir Khan and James DeGale’s remarkable Olympic performances were just the start of an extraordinary journey
Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf