Complainant: OFT own-initiative investigations
Case opened: November 2009
Case closed: 14 February 2011
These included (i) concern that consumers were unfairly pressured into selling their gold , due to the companies' business practice of sending out payments to consumers and requiring them to reject and return these payments within what appeared to be restrictive time periods, failing which their gold is melted down (ii) misleading price advertising combined with a lack of price transparency; consumers did not have sufficient information on the prices offered or paid for gold (iii) a lack of transparency regarding other key matters, such as the insurance arrangements on sending and returning the gold and whether gemstones were purchased, returned or at risk of damage as part of the service.
The Enterprise Act 2002, The Consumer Protection from Unfair Trading Regulations 2008, The Unfair Terms in Consumer Contracts Regulations 1999.
These five investigations were opened by the OFT on its own initiative to investigate the business practices of a number of companies who offer to buy gold from consumers using the postal service.
In the course of its investigation, the OFT sent information requests to the five companies under section 224 of the Enterprise Act and subsequently engaged in consultation with these five companies under section 214 of the Enterprise Act.
In consulting with these companies the OFT outlined its view that they may be operating in breach of certain provisions of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) and the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs) and sought undertakings in lieu of court action. In particular, the OFT identified the following practices with which it confirmed it had concerns:
1. Bullion Buying Ltd trading as CashMyGold (www.cashmygold.co.uk)
2. Green Bullion Europe Limited trading as Cash4Gold (www.uk.cash4gold.com)
3. Sigma Response Limited trading as Postal Gold (www.postalgold.com)
Following the consultation, CashMyGold, Cash4Gold, Postal Gold and their appropriate officers signed undertakings to address the OFT concerns that the above practices may breach the law. Whilst the companies believe that their business practices complied with the law, they have agreed to make revisions to their business practices in light of the OFT's concerns.
The Undertakings require that the companies do not continue or repeat the conduct of concern in this case. For example, they have agreed to:
Cash4Gold, Postal Gold and CashMyGold have also agreed to provide the OFT with copies of any consumer complaints relating to matters within the scope of the undertakings, three and six months following the provision of undertakings in order that the OFT can monitor whether the undertakings are effective and the companies are complying with them.
4. Vertex Watch Company Limited trading as CashYourGoldNow (www.cashyourgoldnow.co.uk)
CashYourGoldNow and its director provided undertakings to the OFT, however, the company also informed the OFT that it had ceased trading in the UK gold buying market.
5. Money4Gold Ltd trading as Money4Gold (www.money4gold.co.uk).
Undertakings were not obtained from Money4Gold. This company ceased trading during the consultation period and is now in liquidation.
Subject to reviewing any consumer complaint information from Cash4Gold, Postal Gold and CashMyGold in the following three to six months, having secured these Undertakings, the OFT has now closed its investigation into this matter.
During the course of its investigation the OFT was provided with helpful investigative assistance by a number of different Trading Standards Services.
Avril O'Meara (020 7211 8492, Avril.OMeara@oft.gsi.gov.uk).
Robert MacDougall (020 7211 5846, Robert.MacDougall@oft.gsi.gov.uk).
Heather Clayton (020 7211 8826, Heather.Clayton@oft.gsi.gov.uk).
Any media enquiries should be directed to a member of our Press Office.
The OFT has announced that it is looking into the business practices of a number of companies who offer to buy gold from consumers using the postal service.
The OFT wrote to the companies asking for information which would enable it to consider whether they comply with consumer protection law.
The OFT has since reviewed information received from the companies and formed the view that the companies may have breached a number of consumer protection laws.
Consequently, the OFT is consulting with the companies to bring about a cessation of the breaches it believes has occurred and seek undertakings. In the absence of suitable undertakings the OFT may take appropriate court action.
The OFT is unable to provide advice or resolve individual complaints for consumers. Consumers can seek advice from Consumer Direct (tel: 08454 04 05 06, www.consumerdirect.gov.uk) or obtain independent legal advice.
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