'Desperate housewives' warned over gold rip-offs
Published 27/01/2010 | 05:00
'DESPERATE housewives' tempted to sell their gold jewellery have been warned not to get fooled into parting with it for a fraction of its worth.
Gold-buying firms have mushroomed due to the downturn and the record highs reached by the precious metals on world markets.
But those tempted to part with their old jewellery were warned by the Consumers' Association yesterday to make sure they do not end up being ripped off.
Those people who sell unwanted gold by post were most likely to end up getting a bad deal, chairman of the consumer body James Doorley said.
"If you put your gold in the post and allow the buyer to determine the price, don't be surprised that they will pay you as little as they can get away with," he said.
His comments follow research in Britain by consumer site 'Which?', which found that people selling gold were getting a tiny fraction of the value of the precious metal.
Mr Doorley added: "If consumers want to get the best price then we would advise people to weigh and if possible to determine the caratage (purity) of their gold and to seek quotes either by visiting jewellers, pawnbrokers or using the online calculators that some operators provide on their websites."
Research carried out by Dublin-based gold trading firm GoldCore concluded that selling jewellery resulted in a loss.
Mark O'Byrne of GoldCore said some gold-buying firms in the Irish market were paying just 55pc of the market value of the metal.
"Those selling their jewellery are only getting a fraction of the value of the actual gold content and a tiny fraction of the original cost of the jewellery," Mr O'Byrne said.
There has been so much controversy in Britain about the prices offered to consumers for gold jewellery that the Office of Fair Trading has asked five firms to explain some of the claims they are making in adverts.
Yesterday, the head of one of the largest gold buying operations in Ireland denied it was ripping off consumers.
Richard Walsh of Galway-headquartered Goldparty.ie said his firm paid between 65pc and 70pc of the market value of gold.
His firm, which has 15 agents organising gold-buying parties across the country and is also involved in buying jewellery by post, pays between €5.20 and €6 a gram (for 9 carat), or €186 for an ounce.
Gold was trading at the equivalent of €773 an ounce on international markets yesterday.
Mr Walsh said three factors determined the price of gold bought from consumers: its weight, the carat -- or purity -- and the market or refinery price.
He said his firm had a profit margin of around 10pc, much like any other business, and he denied that desperate housewives who were strapped for cash were getting a bad deal.
But he acknowledged that the consumer gold-buying sector was unregulated and he called for rules to be introduced.