The Federal Trade Commission told the U.S. House Subcommittee on Commerce on Thursday it supports proposed legislation aimed at protecting consumers who sell gold and jewelry to online buyers.
Jim Kohm, Associate Director of the Enforcement Division of the FTC's Bureau of Consumer Protection, testified that the FTC supports the proposed Guarantee of a Legitimate Deal Act, which would strengthen the FTC's ability to protect financially stressed consumers.
According to the testimony, the FTC has seen an increase in complaints from consumers selling gold jewelry, watches and other precious metals online. People are complaining that some online jewelry buyers provide a price quote only when asked. In some cases, people mail in their items and receive payment only after buyers have melted their items, leaving dissatisfied consumers with limited options.
The proposed legislation 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 deterrent and make it easier for the agency to take action against buyers who violate the law.