May 17, 2010
With rising gold prices and a continuing recession, more consumers are selling their jewelry to businesses that advertise on television and the Internet. Congress is consideration legislation to make sure consumers aren't cheated.
The Federal Trade Commission says it has begun to see complaints from consumers who are seeking to make ends meet by selling gold jewelry, watches, and other family heirlooms containing precious metals. Consumers complain that some online jewelry buyers provide a price quote only if asked.
In some cases, consumers submit their items and receive payment only after buyers have melted their items into their raw form. Once that happens, dissatisfied consumers have limited recourse.
The proposed Guarantee of a Legitimate Deal Act would make sure that consumers have a chance to consider and reject a specific offer to buy their precious metals before an online purchaser melts or resells the items. It also would require businesses that offer to buy consumers jewelry or precious metals to insure items they ship back to consumers who decline their offers.
In addition, the measure would give the FTC the authority to seek civil penalties, which would serve as a powerful deterrent and make it easier for the agency to take action against buyers who violate the law.
Jim Kohm, Associate Director of the Enforcement Division of the FTCs Bureau of Consumer Protection, testified before a House subcommittee, saying that the FTC supports the proposed legislation.
