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N.J. says gold-buying firms cheated customers

49 businesses were cited after undercover probe.

By Karen Datko Jul 6, 2010 6:01PM

This post comes from Mark Huffman at partner site ConsumerAffairs.com.

 

With the high price of gold, jewelry stores that advertise they will buy your gold jewelry are becoming more common. But increasingly, this may be a case of "seller beware."

For example, the New Jersey Office of Weights and Measures has cited 49 gold- and jewelry-buying businesses for alleged violations of state statutes. Following a statewide inspection sweep, officials say they found inaccurate scales that improperly weighed items and resulted in consumers receiving less money than they should.

 

The Precious Metals Task Force began inspections in June following receipt of a consumer complaint. The task force conducted unannounced inspections of jewelry stores and also transient buyers of gold and jewelry who typically operate in hotels and frequently move.

 

"Some of the buyers defrauded consumers, short-weighing their items and likely paying them less than the true value of the items," N.J. Attorney General Paula T. Dow said. "We found violations statewide and we're putting the industry on notice that we won't tolerate the cheating of consumers."

 

'Springy' scales

A scale that had a spring mounted under the weighing platform was among the confiscated scales displayed at a press conference at the state Office of Weights and Measures in Avenel. The spring pushed back as an item was weighed, producing an inaccurate reading.

 

"Consumers who need to sell their heirlooms and keepsakes to raise cash deserve to get every dollar that their gold, jewelry and precious metals are worth. But buyers who use unapproved, uninspected or purposely tampered-with scales are cheating consumers out of money," said Thomas R. Calcagni, acting director of the state Division of Consumer Affairs.

 

The businesses were cited for violating laws that require detailed receipts to be provided to sellers, as well as for using scales that were unregistered, not inspected, not approved for use in New Jersey, or that had been unsealed and tampered with.

 

In New Jersey, receipts must include information about the type of precious metal or item purchased, the fineness (quality) of the metal, the weights of the items purchased, the prices paid, and the name and address of the buyer. That information is important to consumers who may later wish to dispute the transaction or attempt to reclaim their jewelry during the 48 hours when the buyer is required to keep the purchased item.

 

Transient gold- and jewelry-buying businesses are required to post a $5,000 bond with the state in order to conduct business.

 

More from ConsumerAffairs.com and MSN Money:

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