Rip-offs on the rise as gold gains more ground
Bethany Lindsay, ctvbc.ca
Published Tuesday, August 9, 2011 3:12PM PDT
As the price of gold reached a record high Tuesday, the Better Business Bureau warned sellers across B.C. to beware of scammers hoping to rip off people cashing in.
Prices for the precious metal have soared over $1,700 an ounce, and BBB President Lynda Pasacreta says that she's seen a corresponding increase in people falling victim to unscrupulous buyers.
"We've noticed that, especially in the online world, people are sending in their gold, and then they're either being disappointed with the price they're being quoted or they're not hearing anything -- [the gold] just kind of disappears," she told CTV News.
The BBB is currently handling 19 complaints against a single gold-buying company in mainland B.C.
Pasacreta says the number of businesses offering cash for gold has "exploded" since gold prices started taking off about a year ago.
"It meets that emotional demand in the market," she said.
Some businesses run in-home "gold parties" complete with a personal appraiser, while others encourage sellers to mail in their jewelry and gamble on receiving a good price.
Pasacreta says that wise consumers should research the companies they're dealing with, and be sure to photograph their jewelry if they're going to risk mailing it to a buyer.
"Our advice has always been shop locally and know what your jewelry is," she said. "[Don't] just dump it in an envelope and send it off."
An important part of the process is figuring out the gold's purity. The $1,700 benchmark price is for pure gold, while 14-karat gold, for example, is only 58.5-per-cent pure.
"You've got to know what you've got before you let it go," Pasacreta said.
She says sellers should shop around before letting go of their gold to make sure they're getting the best price.
CTV News took a 14-karat gold chain to three different buyers in Vancouver on Tuesday, and got a wide range of offers.
Vancouver Gold on Broadway offered $411.41, Vancouver Gold and Silver on Burrard Street said $475.42 and Gold Vancouver on West Pender Street suggested $482.60.
The BBB also advises against allowing a buyer to weigh jewelry with different purities together, because some companies will pay based on the lowest karat value. Sellers are advised to check out the terms and conditions of online gold-buying companies, and ask about their guarantees on returning jewelry if the price is unsatisfactory.