Weiner Writes From Capitol Hill
We’ve all seen the flashy commercials on late night television: Cash4Gold, often employing B-list celebrities like Ed McMahon and MC Hammer, lures viewers by promising they can get top dollar for their unwanted jewelry. All they need to do is send in their gold, and they’ll receive a check in the mail a few days later.
It sounds too good to be true.
As it turns out, it is too good to be true.
An analysis I conducted showed that dealing with Cash4Gold is far from easy. In reality, the Florida-based company routinely preys on cash strapped New Yorkers through deceptive marketing, low payment policies and misleading return policies.
Working with Consumer Reports, I found the following:
First, Cash4Gold pays out pennies on the dollar. The company paid between 11 percent and 29 percent of the current market price for gold, while pawn shops paid about 35 percent – 70 percent. According to Consumerist. com, Cash4Gold intentionally lowballs offers to customers and then, if a customer complains, increases offers by claiming to have reassessed the value of the submitted item. In fact, customer service agents are reported to receive a commission for keeping the pay-out low.
Second, Cash4Gold has a deceptive return policy. Cash4Gold advertises that consumers have 12 days to return the company’s check if the consumer does not want to sell her/his jewelry for the below-market value price. However, in practice, Cash4Gold requires consumers to return the check within 12 days of it being issued — regardless of when the consumer receives the check. This will often leave customers with only a few days to decline the offer from Cash4Gold, while still under the assumption that they have a full 12 days.
Finally, Cash4Gold often violates its own existing return policies. Consumerist. com reported complaints that customers who refuse the Cash4Gold offer within the accepted return period are told that their item has already been melted down and that the item cannot be returned. Numerous customers have complained online and to the post office that Cash4Gold claims that the customer’s gold was “lost in the mail.” USPS has conducted internal investigations and according to the Postal Inspectors office, they found that Cash4Gold had in fact lost the items. This hasn’t happened just once or twice, but nearly 1,300 times.
To combat this consumer rip-off, I have requested that the Federal Trade Commission investigate these misleading practices. In addition, I will be introducing the “The Guarantee Of a Legitimate Deal Act of 2009” or GOLD Act, which would: 1) issue fines to companies that melt down a consumer’s gold without their permission before the return policy has ended; 2) require companies to give consumers ample time to request a refund; and 3) mandate that companies ensure returned jewelry is insured with the post office at the same monetary value as the consumer originally insured it.
I recently met Manhattan resident Frank Poindexter, who has had the misfortune of dealing with Cash4Gold directly. His story should serve as a warning to us all. Mr. Poindexter had his jewelry independently appraised by two reputable jewelers in New York City. His jewelry was valued at more than $200. When he sent his jewelry to Cash4Gold, the amount he was offered was shockingly low. He wasn’t offered 50 percent or even 10 percent of the appraised value.
Instead, he received a check for 15 cents.
As if that wasn’t bad enough, when he contacted Cash4Gold, they actually accused him of trying to scam the company. This isn’t how businesses are supposed to operate. Business transactions generally involve a certain amount of trust — a fact this company is clearly taking advantage of.
That is why it’s time for us to take a stand against predatory companies like Cash4Gold. There’s no reason to allow Cash4Gold to continue its policy of kicking struggling consumers while they are already down.