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
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
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 General

Recruitment Genius: Sales Executives - OTE £60,000

£25000 - £60000 per annum: Recruitment Genius: Are you passionate about Custom...

Recruitment Genius: Care Workers Required - The London Borough of Bromley

£15000 per annum: Recruitment Genius: This homecare agency is based in Beckenh...

Recruitment Genius: Sales Executives - OTE £50,000

£25000 - £50000 per annum: Recruitment Genius: Are you passionate about Custom...

Recruitment Genius: Sales Executives - OTE £50,000

£25000 - £50000 per annum: Recruitment Genius: Are you passionate about Custom...

Day In a Page

Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
10 best high-end laptops

10 best high-end laptops

From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
Susie Wolff: A driving force in battle for equality behind the wheel

Susie Wolff: A driving force in battle for equality behind the wheel

The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

'No abs Adam' plans to muscle in on Usain Bolt's turf

After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman