Is Cash4Gold Being Investigated for Paying Too Little?

The Florida Attorney General recently announced it is investigating Cash4Gold, and it’s interesting to note the following in its public announcement:

There is a pattern of complaints from consumers who allege that they are not paid nearly enough for the gold they send to Cash 4 Gold, some checks are as small as .07 cents.

Obviously, seriously underpaying for gold is not at this point illegal, even if it’s a pretty shady thing to do in tough times like these. A few weeks ago, I asked whether there should be some kind of industry standard regarding how much should be paid to people who trade in gold; many commenters worried about possible government intervention, and argued, quite rightly, that customers have the ability to shop around and get the best deal before trading in their gold.

Still, that isn’t easy to do on the Internet. Cash4gold, like most of the Internet companies that engage in this business, requires you to send in your gold before they appraise it.  If you complain about the amount you are offered, they sometimes up it, and they have been accused of telling consumers their gold was melted regardless. (The company denies that charge.)

Would it be easier if the company – and all Internet gold buying companies – disclosed its rate of payment ahead of time (based off the gold price)?  Yes, that would take some of the mystery out of deal-making, but it would certainly make shopping around easier. And while the company that offers the best rate would likely win in such a scenario, it wouldn’t always – just as the cheapest site doesn’t always get the customer on the Intenret.

I am just putting this out as a suggestion; what do you think?

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JCK News Director