Since the price of gold has reached extremely high prices a number of crooks and conmen have crawled out of the woodwork to scam people selling their old and scrap gold.
The following are the latest scams that we’ve heard about that you should avoid at all costs.
TV Gold Companies:
You will undoubtedly have seen a glut of new companies advertising on tv with flash adverts promising top prices for your gold.
Some of these companies are actually paying around 50 PENCE per gram as opposed to the current price of around £7.10 per gram
It appears that what some of these companies are actually doing is weighing packages they recieve without opening them, offering a very low price based on the weight of the unopened package, and issuing a fake assay report with the issued cheque.
We have evidence that this is the case since one of our readers sent a bag containing £5 worth of BRASS CHAIN bought from a DIY store & recieved a cheque for £67 along with an assay report telling them the fictitious amount of gold contained in their brass chain.
Obviously this is a numbers game for some of these companies. They are interested in churning through as much gold as they can and paying the least amount of money possible for it in the process.
They rely upon getting a huge quantity of scrap gold at very low prices to compensate for the low amount of rubbish they inadvertently end up paying for.
Paying for the odd parcel of rubbish is not so bad when you’re making 90%+ on the scrap gold, as opposed to the 2-3% that genuine scrap gold dealers make.
Along a similar line to the TV gold companies, some of the gold party companies are offering extremely low prices for scrap gold, you could end up with well under 20% of the true value of your gold (ie, if they offer you £100 your gold is probably worth in excess of £500)
These companies rely upon people struggling to make ends meet accepting the cash that’s in front of them rather than sending their gold to a reputable Scrap Gold Company
It might be a bit more hassle to post your gold to a reputable company, but it is well worth the extra 5 minutes!
If you look closely at the prices offered by dealers you will see some companies always offer more per gram than anyone else. For example, if the gold price is £7.10, they will be offering £7.40
However, read the small print and you will see that these companies charge a “refinery fee” of UP TO 10% ! – this means that you are actually getting less than the companies advertising the true rate.
Reputable scrap gold buyers DO NOT charge refinery fees – the price they quote is the price you’ll get.
Tips to avoid being scammed
Always sell your gold to a reputable well established company
Always carefully weigh your gold before you send it – some of these companies will claim your gold weighs significantly less then it actually does.
Always note the carat of the gold you send – some of these companies will claim your gold is a lower carat & therefore worth less money.
Always research the company you send your gold to for user reviews, etc to make sure they are genuine, honest dealers.
And once again since it is absolutely vital:
Always sell your gold to a reputable well established company!!!
We list a very small number of long established, highly respected gold dealers on our scrap gold dealers page.