Don't let sharpies 'devalue' your gold
Do you have any old gold bracelets or sterling silver place settings to sell? Look before you leap. The skyrocketing prices of gold and silver have spurred an unprecedented rush to sell gold and silver jewelry, heirlooms, and coins to retailers and wholesalers. Long lines have stretched outside some jewelry stores and precious metal refiners in cities around the world.
But the US Office of Consumer Affairs is issuing this new warning: Beware of being gypped by neophyte, unlicensed, and sometimes downright unscrupulous gold and silver dealers.
"Consumers are going to be getting ripped off," declared Midge Shubow of the US Office of Consumer Affairs. Dealers may buy gold and silver objects at a much lower price than the precious metals are worth and in some instances they may be literally "tipping the scales" to their advantage.
In cities across the United States, local consumer group investigators are fanning out into "gold districts," such as Manhattan's West 47th Street between 5th and 6th Avenues, to move against wrongdoers:
* Investigators with the city's consumer affairs department have discovered that some jewelers keep their scales out of the seller's view. "If you can't see the scale, they're trying to hide something," says an agency spokesman. The department, which also acts as the city's sealer of weights and measures, plans to make unannounced checks on how accurate many gold-district scales are.
* In Chicago, the Illinois Office of Consumer Affairs is getting a growing number of calls for assistance from people who want to sell gold and silver but don't want to be cheated. John Cunningham, one of the office's investigators, says that well- documented complaints will be turned over to the state attorney general or other law- enforcement agencies for action. A common practice, he says, has been for disreputable coin dealers to pay inexcusably low prices for silver coins.
* In Boston, University of Massachusetts consumer law Prof. Richard Borten, a former Boston Consumer's Council executive secretary, urges potential silver and gold sellers to have an independent appraisal of what they own before they approach jewelry store buyers. Although some appraisals can be expensive, this may be the only way consumers can really know if they are getting a fair price, he believes.
Nationally, perhaps the best tools local consumer groups have to fight gold and silver ripoffs are the various consumer protection laws many cities and states have which are patterned on the federal Consumer Protection Act. In essence, the act makes it a crime for businessmen to engage in fradulent or deceptive practices.
If, for instance, the New York City Department of Consumer Affairs finds that a certain gold buyer advertises he is paying "the highest prices" for gold when actually he is paying a low price compared with others, he can be prosecuted. Law enforcement officials must most often find a "pattern of abuse" in order to make charges stick.
Many dealers who buy gold and silver at a lower than daily market rate prices claim they are only protecting themselves from sudden drops in the price of the precious metals.
Reputable dealers take a small percentage of the sale as a commission. If you know that 14-karat gold, for instance, is roughly 58 percent pure gold, and if you can get an accurate weight, you'll have a better idea of how much your gold item is worth.