OFT challenges cash-for-gold firmsWatchdog to scrutinise TV gold buyers' practices
21 January 2010
The Office of Fair Trading is looking into the practices of cash-for-gold buyers to establish whether they are complying with consumer protection legislation.
The Office of Fair Trading (OFT) announcement comes on the same day that Which? unveiled new research revealing that the cash for gold industry is offering very bad value for consumers as well as poor service.
The OFT is concerned that these firms may not be complying with consumer protection legislation. Difficulties with getting back gold once the gold buyers’ cheques were returned were among the problems highlighted.
Juliet Young, director of 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.'
A Which? Money investigation found that cash-for-gold sites paid around a quarter what consumers could get for gold jewellery if they went to a high street jewellers. In one case, a new necklace costing £399 was valued at £22.50 by a cash-for-gold buyer, while a high street jeweller was willing to pay £119. You can read more about our findings in the Which? cash for gold companies advice guide.
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