Gold-buying firms exposed by OFT

Companies that buy gold for cash have grown in number in recent years

Three companies that buy gold from consumers by post have been ordered to improve their treatment of customers by a watchdog.

Two others ceased trading after being contacted by the Office of Fair Trading (OFT) during a year-long investigation.

The high price of gold has meant that companies that exchange people’s gold for cash have grown in popularity.

But the OFT found that a handful were locking customers into accepting the offer made for their gold items.

Sometimes their jewellery was melted down on the assumption that they had accepted a quote.

The three companies that have accepted they must change their business practices were CashMyGold, based in Manchester, Cash4Gold, based in west London, and Postal Gold, based in Douglas in the Isle of Man.

The two that ceased trading were CashYourGoldNow, based in Newbury in Berkshire, and Money4Gold, based in St Albans in Herefordshire.

The OFT has raised concerns with all five about the way offers were made for people’s gold, such as jewellery.

The watchdog found that some businesses were sending customers a payment for their gold, which if not rejected and returned within a very short period of time by customers, was taken as consent for the payment. That meant the gold was then melted down.

Gold-buying companies have become much more prominent in recent times, with many advertising on television or appearing on temporary stands in shopping centres.

Previous research for the consumer organisation Which? showed that some gold companies that advertised on television offered an average of just 6% of the gold’s retail value.

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