Cash4Gold – Beware

We’ve all seen them – the flashy “Cash4Gold” commercials, at times they feature people on the street dancing, or at other times, M.C. Hammer promising fast cash in turn for your old, unused jewelry. Although human nature makes us want to unconditionally trust the dancing person or even with his track record, M.C. Hammer, it turns out that Cash4Gold may not in fact be too legit to quit.

In recent news, Representative Anthony D. Weiner fingered Cash4Gold because of their bad business practices. Making a speech in front of jewelry appraisers that were legitimate, Weiner requested consumers to take their business to a place that they knew was valid as opposed to the shady mail in gold exchange.

The way that Cash4Gold works is that consumers use special envelopes to mail jewelry and gold to the company’s offices in Florida. According to the advertisements, the company will provide customers with a quick appraisal of the value of the items they have sent, and then they will mail them a check for that amount.

In theory, customers will be given a twelve day period in which they are able to return their check and get the jewelry back. Yet according to research by Rep. Weiner and Consumer Reports, Cash4Gold paid out only 11 to 29 percent of the actual value of valuables sent to them, and sometimes they did not send jewelry back when it was asked to do so within the 12 day period.

Weiner urged the Federal Trade Commission to look into the whole Cash4Gold problem, adding that he planned to introduce legislation that could regulate companies that use mail to exchange cash and jewelry.

This legislation would put fines on companies that melt down gold without the owner’s permission or before a return period has been passed. It will make companies allow enough time for consumers to request a refund and make sure that companies actually insure the jewelry they are returning to consumers.

Mallory McGuinness works for a debt collection agency. Also she writes stories on business, finance, consumer spending and collection agencies.