Beware of gold buying scams

Rome Observer Columnist

Today it seems like everywhere you look there is a “We buy gold” sign. The price of gold has skyrocketed (this week it was reported to be at $1,900 an ounce) and because of that there are many people who have set up shop to buy your scrap gold. Pawn shops, jewelry stores, mail order businesses and even those who set up in a local motel or hotel room for a couple of days are vying for your business by promising to” turn your unwanted gold into cash!”. You may see this as an easy way to make a few extra bucks and though it may be, if you are not careful, you could fall for one of the many scams that pervade this industry. You may have seen the TV commercials that ask you to put your unwanted gold jewelry into an envelope and send it to them, and in return, they will send you a check. Unfortunately, based on the complaints that I have fielded recently, some of the local customers were unpleasantly surprised at the very small amount of money that was sent back to them. To compound matters, when the customers complained and asked for a return of their jewelry, the gold buying company stated that the gold had already been melted down, making a return impossible. Another common problem with selling your unwanted gold to an unknown person or company is that these transactions tend to be fast paced, and it is not uncommon for the gold buyer to underweight and understate the true value of your gold, thus resulting in a lower take. If you do choose to sell your gold to an online company, make sure that they clearly state their rates and their procedures on their website. If they do not or even refuse to give you a rate before sending your items in, this should be a red flag that they may be an unscrupulous company. In fact, when Consumer Reports performed a study of Gold Buying prices, they determined that online and/or mail-in gold buying companies only offered 11 percent to 29 percent of market value, while jewelers and pawn shops offered up to 70 percent. While this may not hold true in every circumstance, it certainly lends credence to the notion that a brick-and-mortar establishment is more apt to give a fair price. In addition, if you should decide to change your mind, online companies are harder to hold to task or to get your items returned. You may see from time to time the traveling gold buyers temporarily setting up shop in a motel or hotel conference room. This tends to promote an air of legitimacy to the customer but beware, the gold buyer will be long gone in a few days and so will any hope you may have of getting a refund or a return of your jewelry. In an attempt to provide a little more accountability for these buyers, the City of Rome has instituted a licensing procedure for anyone who wishes to buy gold or other precious metals in the city. In Rome, there are several reputable gold buyers who have been in the business for many years and are licensed by the city to do business as a buyer of second hand goods. They must pass a police background investigation and follow a strict set of rules to remain licensed. If you decide to sell your unwanted gold, it is best to educate yourself prior to conducting any transactions. You should try to determine the possible value and weight of your gold before attempting to sell. This will give you the upper hand in negotiating a better price for yourself. Find out what the price of gold is on the day that you plan to sell, and test the gold buyer by asking them that very question. If their numbers don’t match yours, walk away. Ask the gold buyer to verify that their scale is accurate before they weigh your gold. If you have a small item that has a known weight, bring it with you and have them weigh it on the very scale that will be used to weigh your gold to make certain that the scale is accurate. Be certain to verify the reading for yourself. Don’t be afraid to take your items to several places and compare offers; you have no responsibility to take the first offer a buyer makes. Check the rating of the business with the Better Business Bureau. Obviously, if there are complaints lodged and ratings are low, move on to another gold buyer. There are also several sites that are dedicated to reviewing gold buyers, so if you do decide to sell online check out their reviews before you proceed. If you plan on selling your unwanted gold, do your homework, shop around and deal with people or businesses that you know or that come recommended by friends or family.

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