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OFT questions postal gold rush

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The Office of Fair Trading (OFT) has launched an investigation into the legitimacy and value of increasingly prominent postal gold merchants.

Firms such as Cash4Gold and PostalGold, have become widely advertised following the record price rise of gold seen in recent years. Consumers struggling under a heavy recession are encouraged to send off their jewellery for valuation with the option of interest free cash in return.

But OFT’s investigation comes after consumer advice website, Which?, found that merchants were offering an average of just 6% for consumers’ gold compared to current retail prices.

The website’s undercover operation saw several postal gold companies sent items worth £729 in retail value, but offerings were a little as £38.75 in return.

“The cash for gold market is unregulated, and this investigation has raised some serious concerns about the fair treatment of consumers,” said Peter Vicary-Smith, Chief Executive of Which?

The OFT is now reviewing the companies’ terms and conditions to make sure innocent customers are not being fleeced of their prized possessions. In particular, the Office will study the consumers’ right to reject a merchant’s valuation as some have complained that their items have not yet been returned.

“Buying gold using the postal service is a relatively new business model… we want to check that the market and businesses operating in it are developing in a way that treats customers fairly,” said Juliet Young, the OFT’s Consumer Market Group Director.

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Written by Andrew Hodges

January 26, 2010 at 4:56 pm

Posted in Compliance, LinkedIn

Tagged with , ,

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