Gold-buying firms warned by OFT

Three companies that buy gold jewellery from consumers have been ordered to improve the way they treat their customers following an investigation by the trading watchdog.

The firms - CashMyGold, Cash4Gold and Postal Gold - have agreed to change their business practices after the Office of Fair Trading (OFT) raised concerns that people were being "locked into" accepting offers for their gold.



It found that the businesses sent consumers a payment, and if this was not rejected and returned within a restrictive time period, their silence was taken as consent and their jewellery was melted down.



A further two companies - CashYourGoldNow and Money4Gold - stopped trading after the OFT approached them about improving their business practices. St Albans-based Money4Gold is now in voluntary liquidation.







There has been a increase in the number of companies offering to buy old gold jewellery by post in the past couple of years as the price has soared.



The OFT launched its investigation in January last year following a number of complaints from consumers, which raised concerns that certain gold firms were not treating customers fairly.



Following the investigation, Manchester-based CashMyGold, London-based Cash4Gold, and Postal Gold, of the Isle of Man, have agreed to change the way they make offers for people's gold.



Customers will now have the option of either receiving a quotation which they must actively accept, or they can receive a payment, which they can then return, as is currently the case.



Both options will have to be displayed clearly and prominently to consumers, with the risks of each option set out.



Customers will also have to be given clear information on the prices being offered for their gold, including details on the weight and carat of the items being assessed.



Firms will also have to make clear that when they claim to pay a "high price" or a "top price" for gold, these prices are based on the scrap or smelt value of the gold, and not its value as jewellery.



In addition, customers must also be given information on other important features of the service, such as whether gemstones contained in jewellery are bought or returned, and what the risk of them being damaged or lost is.



Heather Clayton, senior director of the OFT's Consumer Group, said: "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. 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 about whether they wish to part with their possessions."



Research carried out by consumer group Which? Money into the market for companies that buy gold through the post found that the firms consistently offered lower prices than those offered by pawnbrokers and independent jewellers.



It found that the firms offered an average of just 6% of the retail price of their gold, compared with an average of 25% offered by pawnbrokers and high street jewellers.



It said the firms were "shockingly bad value" and urged people not to use them.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs General

Recruitment Genius: Senior Environmental Adviser - Maternity Cover

£37040 - £43600 per annum: Recruitment Genius: The UK's export credit agency a...

Recruitment Genius: CBM & Lubrication Technician

£25000 - £27500 per annum: Recruitment Genius: This company provides a compreh...

Recruitment Genius: Care Worker - Residential Emergency Service

£16800 - £19500 per annum: Recruitment Genius: Would you like to join an organ...

Recruitment Genius: Senior Landscaper

£25000 - £28000 per annum: Recruitment Genius: In the last five years this com...

Day In a Page

The long walk west: they fled war in Syria, only to get held up in Hungary – now hundreds of refugees have set off on foot for Austria

They fled war in Syria...

...only to get stuck and sidetracked in Hungary
From The Prisoner to Mad Men, elaborate title sequences are one of the keys to a great TV series

Title sequences: From The Prisoner to Mad Men

Elaborate title sequences are one of the keys to a great TV series. But why does the art form have such a chequered history?
Giorgio Armani Beauty's fabric-inspired foundations: Get back to basics this autumn

Giorgio Armani Beauty's foundations

Sumptuous fabrics meet luscious cosmetics for this elegant look
From stowaways to Operation Stack: Life in a transcontinental lorry cab

Life from the inside of a trucker's cab

From stowaways to Operation Stack, it's a challenging time to be a trucker heading to and from the Continent
Kelis interview: The songwriter and sauce-maker on cooking for Pharrell and crying over potatoes

Kelis interview

The singer and sauce-maker on cooking for Pharrell
Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea