Jewelers Hit by Gold Scams

With more jewelers buying gold from the public, gold-related crimes are increasing, says John Kennedy, of Jewelers’ Security Alliance.

Kennedy’s group has received over 28 reports of gold-related frauds committed against retail jewelers in 2009, compared with six last year.

"Every time you buy off the street you have to be on your guard," Kennedy says. "With so many people buying gold, there is widespread opportunity for fraud."

Laurence Hyman, president of Chicago Jewelers Association, which runs a crime alert network, says he hears about new scams "a couple of times a week. There have been tons of these scams going on," he says.

JSA has documented two main kinds of gold fraud:

  • The seller shows the jeweler a real gold item, but switches it for a nongold look-alike.
  • A jeweler buys a piece that tests positive as gold but turns out to have been heavily plated.

Hyman has heard reports of hoop earrings with gold posts and stainless-steel hoops and counterfeit and underweight "gold" coins with real gold content. He’s also heard of a substance that looks like white gold and tests as 18k, but isn’t. "It’s some sort of new alloy, I gather," he says.

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