When the times are tough, like they are today, a lot us try think of some ways to raise a little extra cash. Garage and yard sales are the tried-and-true, classic examples. However, one of the hottest selling items today is "old" gold. With the economic downturn and huge upswing in the price of gold happening almost at the same, gold dealers are on the radio, television, and internet offering to buy it. And at "top" prices. For cash-strapped consumers, it's hard to resist a cash offer for broken gold jewelry, or things you haven't worn in years.
Don't be so quick to jump into the gold market head first, though. A new lawsuit against the dealer "Cash4Gold" shows you need to be careful. You may not get that quick and easy pay day you were expecting, and you could lose your gold altogether.
You've probably seen or heard Cash4Gold's advertisements. They make it sound like an easy way to get some cash. All you do is ask for of one their special mailing packages, send them your gold, and they'll mail you a check after they test, evaluate, and weigh your gold. The company even has a guarantee: If you don't think your gold was fairly evaluated, you can return the check or call the company within 12 days of the date on the check, and the company will return your gold to you. Sounds like a good deal, right?
Not according to some consumers who tried to do business with Cash4Gold. Elizabeth Kirts and Rachel Bernhardt are "representative plaintiffs" in a class action lawsuit recently filed in a federal court in California. The suit claims that Cash4Gold commits fraud, and essentially "steals" the gold sent to it by either:
- Claiming the gold was lost in the mail and was never delivered to or received by the company. The company, it's alleged, keeps the gold without paying for it
- Making sure the consumer's check for payment of the gold isn't delivered until after the 12-day guarantee period has run out. By that time, the lawsuit claims, Cash4Gold has already melted the jewelry, and so it can't be returned. The complaint also claims that the company underpays for the gold, but the consumer has no choice but to accept the check because the 12-day return period has expired
The suit claims that Cash4Gold has broken several California and federal consumer fraud laws, and other laws as well. It asks for damages, including the repayment for gold taken by it and punitive damages.
Generally, consumer fraud and deceptive business practices laws protect the public from being tricked or duped by businesses. It's illegal, for example, for a business to misrepresent or lie about what it will do for you in exchange for your money. Basically, a business can't take your money and not give you the goods or services it said it would give you.
The Cash4Gold lawsuit is a good example of how these laws are supposed to work. The consumers claim that the company either stole or didn't pay full-value for the gold it was sent, and that it duped sellers into believing that they has 12 days to accept or reject the company's cash offer for the gold.
Protect Yourself and Your Gold
Keep in mind that the lawsuit is still pending, and it hasn't been found that Cash4Gold did anything wrong. That doesn't mean you shouldn't learn some valuable tips from the case, though:
- Try to avoid mailing your gold to any dealer. You lose control over your gold and you're at the mercy of the dealer. Check your local newspaper or telephone directory for companies offering to buy gold and take it there in person. Many jewelers, coin shops, and pawn shops offer to buy broken or unwanted gold jewelry
- If you want to do business with a mail-in dealer, insure your package for the fair value of the gold, and send the package by certified mail or some other method that lets you make sure that the package was delivered
- If you're using the mail, ask the dealer for a quote on what it's willing to pay for your gold before the dealer sends you a check
- Check with the Better Business Bureau (BBB) or your local consumer protection agency to see if any complaints have been filed against the dealer you're thinking about doing business with
The times are tough enough, and money's already tight. You don't need the added stress and frustration of losing or getting under-paid for valuable property like your gold. With gold prices at a record high, you can indeed make some extra cash by unloading some of your broken or unwanted gold jewelry. There are reputable gold dealers out there. Taking some time and doing your homework will go a long way in helping you get that easy pay day.
Questions For Your Attorney
- If I think a gold dealer under-paid me, what's the first thing I should do?
- Do I have to report the money I get for my old gold on my income tax returns?
- I'm thinking about opening my business for buying and selling gold and other precious metals. Do I need any special licenses?