Gold Made Simple

Gold Made Simple

January 29, 2010 03:00 ET

OFT to Investigate Low Rate 'Buy Gold' Companies

MANCHESTER, UNITED KINGDOM--(Marketwire - Jan. 29, 2010) - The Office of Fair Trading is set to investigate 5 companies who buy gold from consumers, amid fears that they are offering hugely unfair rates to individuals who are often already struggling to meet their financial demands.

The price of gold has seen record highs during the economic downturn and this in turn has contributed to a rise in the number of companies offering to take gold from consumers in a cash in hand type of deal. While this might seem like a convenient service and one that benefits consumers, the five companies in question have been accused by the OFT of offering 'shockingly bad' rates.

The announcement follows an investigation by consumer group, Which? during which the group sent gold items to a number of companies and establish how much they would buy them for. The investigation revealed that on average, these companies offered the consumer just 6% of the total value of the items in question. The consumer group has advised that pawnbrokers and independent jewellers often offer much better rates.

Following the investigation, the Office of Fair Trading announced it would be investigating five 'unnamed' companies whose rates have proven extremely low, to establish whether or not their terms and conditions complied with consumer law. The consumer Watchdog has concerns that the rights of consumers to reject offers were being overlooked.

The cash-for-gold market remains entirely unregulated, something of huge concern to the consumer group behind the investigation.

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