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OFT cracks down on cash for gold buyers

Investigation slams gold buyer business model

Gold websites

Cash-for-gold buyers have been ordered to improve their business practices, following an investigation conducted by the Office of Fair Trading (OFT). The OFT findings also follow a highly critical Which? investigation into the sector.

The OFT focused on how the online cash-for-gold buyers conducted business, such as delivering quotes in the form of cheques that would have to be returned within a little more than a week, or the offer would be deemed accepted and the gold melted down. These terms have been deemed unfair. 

The lack of clear information on how the gold would be evaluated was also criticised.

Five gold companies criticised

Five firms were highlighted in the OFT investigation. of which three – CashMyGold, Cash4Gold and Postal Gold – have accepted that they must change the ways they operate. The other two, CashYourGoldNow and Money4Gold, have since ceased trading. 

Which? cash-for-gold investigation

Which? reported on the online cash buying sector in early 2010, with findings based on quotes received for a number of identical items of brand new gold jewelley that were send for an evaluation in December 2009. We found that the online cash-for-gold sites including CashMyGold, Cash4Gold, Postal Gold and Money4Gold, paid far less than high street buyers, offering just 6% of the retail value, compared with the 25% offered on average by jewellers.

Follow-up investigation

We have since conducted a further investigation into the cash-for-gold market. Our findings will be reported on the Money News page of April’s issue of Which?.

pound coins

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