OFT Enquiry into Postal Scrap Gold Buying Companies
On 21st January 2010, UK Office of Fair Trading announced that it had requested information from gold buying companies, following a number of complaints.
According to the OFT Press Release:
OFT requests information from gold buying companies
04/10 21 January 2010
The OFT has requested information from a number of companies that buy gold from consumers using the postal service to consider whether they are complying with consumer protection legislation.
Following complaints, the OFT has asked the companies to provide information on their business practices and to explain a number of claims made in their advertising and on their websites. Among the OFT's concerns is whether consumers' rights to reject an offer for their gold and receive it back are being honoured in all cases.
The OFT will also be reviewing the companies' terms and conditions to assess whether they are fair for consumers.
Once the OFT receives the requested information, it will consider what further action, if any, is appropriate. At this stage, no assumption should be made that any companies involved in gold buying have broken the law.
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 operating in it are developing in a way that treats customers fairly.'
Although it is not possible for the OFT to intervene directly to resolve issues arising between individual consumers and firms, in this case the OFT would be interested in hearing about consumers' experiences of using the services of companies who buy gold using the postal service. The team can be contacted via the website at www.oft.gov.uk/goldpost.
1. The OFT is seeking information from the five companies using its powers under Part 8 of the Enterprise Act 2002. The consumer legislation concerned includes the Consumer Protection from Unfair Trading Regulations 2008, Unfair Terms in Consumer Contracts Regulations 1999 and the Consumer Protection (Distance Selling) Regulations 2000.
2. The OFT has not disclosed the names of the companies which are the subject of the requests referred to above. The OFT is considering whether it should change its policy not to name companies at the start of an investigation, following its recent consultation on transparency. See the OFT's consultation on transparency.
3. The OFT will be working closely with local authority Trading Standards Services. If having considered the responses of the companies to the OFT's letters the OFT forms the view that there have been breaches, the OFT or Trading Standards Services may seek an enforcement order under Part 8 of the Enterprise Act, or seek undertakings in lieu of such an order.
4. The OFT does not provide advice or resolve individual complaints for consumers. Consumers who are concerned they have been unfairly treated or want advice on their personal circumstances can contact Consumer Direct (tel: 08454 04 05 06 or visit the Consumer Direct website at www.consumerdirect.gov.uk).
We found the announcement very interesting, and look forward to more news on its progress. See below.
Money Which Report
On the same date, Money Which magazine published a report:
Which? slams cash for gold buyers
Investigation reveals low prices paid for gold
Whilst we delighted to see their report, we found it slightly odd that Which used "retail prices" on three different jewellery items. We believe this is a rather unscientific starting point for their comparisons for two main reasons.
Firstly the retail price of similar or identical items often varies considerably.
Secondly, the intrinsic gold value of the items, at a stated date, would have been a far better comparison figure, and would have given a more meaningful comparison not only between different buyers, but also indicating their approximate profit margins.
Naturally, we e-mailed Which with our comments.
Results of Investigation - Three of Five Companies Given Undertakings to Change Business Practices
OFT takes action against gold buying companies - 14th Feb 2011
Of course, this still does not indicate whether any of these companies pay fair or competitive prices. The weight of popular opinion, together with most published research would indicate that most high profile TV scrap gold advertisers pay abysmally low prices.
Scrap Gold Selling Advice
Advice from experts about selling scrap gold jewellery in the UK and elsewhere. Don't get ripped off.
Not Only Scrap Gold
In addition to buying scrap gold, we also buy quality old jewellery, diamonds rings, watches, certificated diamonds, coins, medals, medallions, silver, platinum, and more. Many scrap gold buyers will not pay anything extra for diamonds.
Scrap Gold Buying Rip Off
Many jewellers & dealers advertising to buy scrap gold jewellery in the UK are ripping people off with low prices & misleading claims. We discuss and name a few of them.
We are happy to buy any quantity of scrap, from a single piece upwards, without limit.
If you have a large quantity of gold scrap to sell, we will accept your instructions on price, or offer you helpful advice on selling. We are one of the longest established and largest gold buyers in Britain.
Fair and Competitive Prices
Our buying prices for gold coins, bars and scrap are fair and competitive, but depend and change based on underlying gold prices, and other market conditions such as supply and demand.
We also frequently buy gold coins from many other countries. There is no import duty or tax on entry to the UK for most gold coins or bars.
Sending Gold Scrap by Post
You are welcome to visit our showroom to sell scrap, but it's also very easy to sell to us using the post. We have a page of advice about sending gold coins and scrap by post.
Other Misleading Gold Adverts
There are lots of them around!
Just one example:-
MyGoldSold.co.uk Laughably Stupid Claim to Pay 30% More for Gold than any UK Buyer
It's hard to believe anybody would make such a ridiculous claim and expect to be believed!
Cash For Gold Scrap Gold Buying Rip Off
Cash4Gold.Com ex employee spills the beans.
Scrap Gold Selling Form
You may wish to print out our form to help make it easy for you to list goods you are posting to us for sale or offer.
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