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Warning About Cash For Gold

Congressman says consumers aren't getting their money's worth

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Want some cash for your gold? In these tough economic times, that sounds like an easy way to make some money. You've probably seen the ad so many a company called Cash4Gold. But now there's a warning about the company.

Frank Poindexter, who lives in Manhattan, says he didn't get much cash for his gold. He took several pieces of jewelry to two New York jewelers, who each appraised the items. He says "two hundred dollars was the value of the gold. And they (Cash4Gold) sent me a check for fifteen cents."

Poindexter attended a news conference in the 47th Street Diamond District, led by Rep. Anthony Weiner (D-Brooklyn/Queens), who accused Cash4Gold of taking advantage of a bad economy.

"What our research found is that the quotes that are given only amount to eleven to twenty-nine percent of what a piece of gold jewelry is actually worth,"  Weiner said.

That sentiment was shared by the Program Director of Consumers Union, Chuck Bell, who pointed out that "those companies have to pay for the advertising. And so, typically, consumers are gonna get a much less attractive deal than if they took the metal to a reputable jeweler."

Representative Weiner, who sits on the House Commerce Committee, is proposing a new law to make sure jewelry isn't melted down before consumers accept a company's appraisal. He also want to force companies to insure returned jewelry at the same value it was mailed in. He says there are lots of complaints about lost jewelry. Weiner added: "I can understand one or two times having lost something in the mail. But 1,300 times does raise serious questions about whether something fishy is going on."

For its part, the company tells us: "Cash4Gold...worked closely with Florida officials to create...the first law of its kind regulating the mail-in gold buying industry, and we welcome the opportunity to work...on a similar bill that is national in scope."

The company also said "Cash4Gold is devoted to providing top-notch customer service, and we provide our customers with 12 days in which they can either accept our offer or request their items back, which we send immediately, free of charge and insured at no cost to the customer.”

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