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Gold-buying companies raise trading concerns

Published on 22 Jan 2010 under category: legal

Gold-buying companies need to make clear their terms and conditions, according to a government body.

The Office of Fair Trading has asked companies for more information on their businesses practices following complaints from sellers who received significantly less than the market value for their goods.

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."

Sellers were not only receiving poor returns, but they were in danger of having jewellery held to 'ransom' and were not being informed that they could reject very low quotes.

A Which? investigation this week revealed that gold companies that advertise on television were on average giving back sellers only six per cent of the gold's original value.

The magazine found that three pieces of brand new gold worth £729 were only worth £38.57, according to CashMyGold. The company Money4Gold claimed that a £399 gold necklace was 'not gold' and the seller would have to pay £11 to have it returned.

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