Beware of Precious Metals Fraud During Economic Uncertainty

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With thousands of people filing for unemployment in the UK, and an unknown future economy, local pawnbrokers, cash-for-gold operators, and precious metals dealers may see an increase in people cashing in their jewellery and coins for cash.

In fact, a recent U.S. industry report headline stated “Gold Volatility Empties Jewellery Boxes in Wild Selling Spree,” and noted that gold buyers have seen a frantic push by individuals racing to sell their little-used jewellery in the U.S. and Europe amid worries of future prices.

Unfortunately, not all those metals coming into stores may be precious.

There have been several reports that U.S pawn shops were seeing spikes in fake gold jewellery scams. Several law enforcement agencies across the country have seen a trend of people trying to sell their “gold jewellery worth hundreds of dollars” to unsuspecting bystanders. The scam involves folks who say they need to buy gas and don’t have cash, but they will sell their valuable gold ring/bracelet/necklace really cheap. The bystander feels bad and wants to help the ‘unfortunate’ person out, and gives them cash.  Unfortunately, when the bystander has the jewellery appraised or tries to sell it, they find out it’s fake.

This gas scam was reported in New Mexico, Colorado, California, and other locations.  Some victims were approached at gas stations, others in grocery parking lots.

One pawn shop warned people to be wary because the fake jewellery looks and feels convincing. Unfortunately shops have boxes full of fake gold jewellery, including pieces with fake quality stamps, that fooled either the shop owner or the person trying to sell it.

Thermo Fisher Scientific has warned the gold-buying industry in the past about counterfeits.  In “Fake Gold Bead Necklaces Fooling Shop Owners” they reported that a gold bead necklace had fake beads along the strand that looked like the real ones.  It fooled the shop owner and he lost $2,000.

These scams are not the only way fake gold gets into the system.  GCAL, the Gem Certification and Assurance Lab, listed on its website a number of serious challenges into the jewellery supply chain, including: under-karated metals and irregular alloys, base metal jewellery with false precious metal hallmarks, new plating materials that contain harmful elements, and platings that mask underlying hazardous metals.

The best way pawn shops, jewellers, and cash-for-gold operations can accurately assess if a piece of jewellery is made of real gold is to use an XRF precious metals analyser. To be absolutely sure of the value of the precious metals they buy, use, and sell, X-Ray Fluorescence technology can be utilised as a fast, simple, non-destructive solution for gold analysis. You can measure the content of all gold and precious metals, as well as determine the presence and concentration of other trace, alloying elements, and dangerous heavy elements, which could impact health and the valuation of the pieces.

The innocent bystander may not be able to assess the jewellery properly and could lose out, but those in the business of buying and selling precious metals should make sure they have the technology to accurately identify the metal and the karat weight.  Even a few fake pieces could result in a loss that amounts to more than the instrument would cost.

Blog, gold, Precious Metals, XRF