Cash4Gold Lawsuit Against Whistleblowers Over; Florida State Investigation Just Beginning

from the be-careful-what-dirt-you-kick-up dept

Wed, Feb 17th 2010 8:40pm — Mike Masnick

You may recall that, a year ago, the company Cash4Gold got into some hot water after some rather unflattering stories were written about the company and its practices. Some former employees acted as whistleblowers to explain some of the more questionable practices the company adhered to. In response, rather than proving them wrong or cleaning up its act, Cash4Gold threatened and then sued Consumerist, a complaints website, and two whistleblowers. Of course, the lawsuit just encouraged Consumerist to dig deeper and find even more questionable practices on the part of Cash4Gold. Late last year, the company seemed to realize that suing Consumerist was not a smart move and dropped the lawsuit against the site, though it continued its suit against the whistleblowers.

Consumerist is now reporting that the lawsuit against the whistleblowers is now over as well, but they don't explain exactly what happened. The implication is that Cash4Gold has finally dropped the lawsuits, though it doesn't say that exactly. Plus, the two former employees are reasonably upset that their names are splashed all over the news as being involved in a lawsuit over "breach of contract" from a former employer. Of course, in suing for breach of contract, the company was effectively admitting that what the whistleblowers said was true rather than false.

Separately, Consumerist notes that while this lawsuit is over, things keep looking worse for Cash4Gold, as the Florida state Attorney General has now started an investigation into the company's practices.

So, good work, Cash4Gold. Not only did your actions lead to significantly more attention to your questionable practices, your lawsuit against those who exposed you didn't accomplish anything other than giving them an opportunity to expose more of your practices, and the end result is an investigation from state officials. Maybe next time focus on improving your business, rather than suing those who expose your shady practices.

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Filed Under: whistleblower
Companies: cash4gold

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Rose M. Welch (profile), 17 Feb 2010 @ 8:00pm

...the end result is an investigation from state officials.

I'm sure that their further exposure to the public helped spur Florida's action against Cash4Gold, but it didn't start it.

Cash4Gold was being investigated by Florida at least a year prior to the Consumerist article. Florida received complaints about Cash4Gold's illegal activities from thousands of other jewelers across America, including a large group in Florida, virtually all of whom have to conform to stringent and expensive licensing and sales procedures, most of which are being skipped by Cash4Gold.

As a matter of fact, Florida has waited to act on their findings because a bill with additional legislation for secondhand precious gems and metal sales was planned in 2009. The bill was successful, and now Florida can pound Cash4Gold much harder than they could have before.
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Rose M. Welch (profile), 17 Feb 2010 @ 8:02pm

Re:
You know, looking further, I'm going to amend that.

It actually looks like the investigation that you're talking about is for fraudulent activities concerning checks, which is new, and does seem to be spurred by customer complaints, where I'm talking about action from the state concerning Cash4Gold's lack of licensing for their sales processors, and complete lack of disregard for the state's identification laws.

RoseFail.
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Mike Masnick (profile), 17 Feb 2010 @ 9:47pm

Re: Re:
It actually looks like the investigation that you're talking about is for fraudulent activities concerning checks, which is new, and does seem to be spurred by customer complaints, where I'm talking about action from the state concerning Cash4Gold's lack of licensing for their sales processors, and complete lack of disregard for the state's identification laws.

Heh. Seems like a lovely company, doesn't it?
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Anonymous Coward, 17 Feb 2010 @ 9:57pm

lack of disregard...

failure to disobey?
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Dohn Joe, 17 Feb 2010 @ 10:08pm

SCAM!
"Maybe next time focus on improving your business"

I don't think there's much "business" to be improved. This seemed like a totally sketchy scam the minute I saw the infomercial. Who would be stupid enough to send their valuables away without any guarantees anyway?
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Anonymous Coward, 17 Feb 2010 @ 11:56pm

Re: SCAM!
What he said. SCAM. Any person in need of cash with gold or jewelry to sell should pay a visit to a pawn shop. These businesses are highly regulated in many US states, and they will buy things outright for cash if you don't want to borrow money on a pawn loan.
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TW Burger (profile), 18 Feb 2010 @ 12:41am

You Can'.t Make Up This Stuff
It's nice to see the Internet, so often the target of negative media, be a mechanism for exposing corruption.

I watched the first commercials for Cash4Gold with disbelief when they first appeared. 'Who would be so silly to send valuable jewelry to a post office box in Florida?' I said to myself. Well, many people it seems. Now there are several companies offering what Cash4Gold started. Hopefully these will be far more fair and honest.

Th problem is that this unlikely business model practically begs for the operators to cheat people sending in the gold. The consumer laws don't apply because the public are the sellers. Most people can't quote gold prices and have no knowledge of the percentage of gold in the jewelry sent in. Th buyer could claim it was all cheap plated junk or that the 18 karat rings where 10 karat - an easy theft of one third of the gold (purity is 1/24 for each karat so 8/24). Then there is the question of the alloy. Although most alloys are copper and nickel much good gold jewelry is an alloy of gold and silver, palladium, or platinum, themselves valuable metals. These could be "overlooked" by the gold buyer. The fox in the hen-house and assigned as egg counter and the guard by the farmer model comes to mind.
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amy, 18 Feb 2010 @ 3:30am

THEY'RE SCAMMERS - BEWARE
These guys are out to get anyone who “speaks” bad about them because then the word is out on what scammers they are! They attack! I say – EVERYONE post their bad experiences with them and let them come after all of us! If you’re going to sell your gold or silver – DO YOUR HOMEWORK and find a reputable company. They are out there -but you have to dig. I finally found one that had NO COMPLAINTS and had A PERFECT BBB rating..the Silver And Gold Exchange. They were honest! Refreshing in this business. I recommend them instead. http://silverandgoldexchange.com
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Rose M. Welch (profile), 18 Feb 2010 @ 3:31am

Re:
I'm just full of fail today, lol...
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amy, 18 Feb 2010 @ 3:31am

THEY'RE SCAMMERS - BEWARE
These guys are out to get anyone who “speaks” bad about them because then the word is out on what scammers they are! They attack! I say – EVERYONE post their bad experiences with them and let them come after all of us! If you’re going to sell your gold or silver – DO YOUR HOMEWORK and find a reputable company. They are out there -but you have to dig. I finally found one that had NO COMPLAINTS and had A PERFECT BBB rating..the Silver And Gold Exchange. They were honest! Refreshing in this business. I recommend them instead. http://silverandgoldexchange.com
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Rose M. Welch (profile), 18 Feb 2010 @ 3:33am

Re: Re: SCAM!
No, you should visit a respected jeweler, who will almost always pay you more than a pawnshop, because they don't have to sell your items to new customers, they can break down the materials and use it to make new pieces, that sell faster and for a better margin.
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Rose M. Welch (profile), 18 Feb 2010 @ 3:34am

Re: You Can'.t Make Up This Stuff
Those can and should be overlooked by the gold buyer, because the process used to remove the precious metal renders the other metals useless.
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Rose M. Welch (profile), 18 Feb 2010 @ 3:51am

Re: You Can'.t Make Up This Stuff
...much good gold jewelry is an alloy of gold and silver, palladium, or platinum...

Also, that's just plain incorrect. The point of alloying gold with other metals is to make it hard enough to wear. Silver is just as soft as gold. (Well, pretty close.) Only an idiot would alloy a soft metal with a soft metal to try and make a hard metal. I can't think of a single manufacturer who does that.

Next, platinum is not a metal. Platinum is a family of metals. Palladium is a member of the platinum family. So you can't do anything with 'palladium or platinum'. You'd just be doing something with platinum.

What most people mean when they say 'platinum' is 950 platinum, which is one of the rarest varieties. Until recently, it was the only platinum metal available for use in casting jewelry (other kinds of platinum got bubbly during the casting process), so it's what people think of when they think of platinum.

In 2000, Tyler Teague of Jett Research came up with a new way to cast platinum metals, specifically palladium and ruthenium, thus sparking the use of palladium in jewelry. Palladium is about par on cost with fourteen karat gold, so there wouldn't be any point in alloying gold with palladium when you can just sell the palladium and have a better metal.

Last, but not least, most high-end companies have stopped using nickel, since most people are at least slightly allergic to it. In fact, white gold is by far more popular in the US than yellow gold, and white gold doesn't have nickel at all, even in cheap varieties, because it's alloy metals have to be white to make the gold 'white'.

Now, all white gold has a rhodium layer that's electroplated on (Rhodium being yet another kind of platinum...) to give it a bright-white look, but that can't be removed for profit. In fact, the rhodium-plating rubs off and has to be reapplied many times throughout the life of the jewelry.
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Rose M. Welch (profile), 18 Feb 2010 @ 3:54am

Re: THEY'RE SCAMMERS - BEWARE
I recommend taking it to a respected jeweler in your area, who should weigh and price your jewelry right in front of you, and give you a price on the spot.
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Rose M. Welch (profile), 18 Feb 2010 @ 3:54am

Re: THEY'RE SCAMMERS - BEWARE
I recommend taking it to a respected jeweler in your area, who should weigh and price your jewelry right in front of you, and give you a price on the spot.
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taoareyou (profile), 18 Feb 2010 @ 5:42am

Re: Re: You Can'.t Make Up This Stuff
I never knew all this stuff. It's quite interesting. :)
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Jimbo, 18 Feb 2010 @ 5:44am

No, just.. No.
Your screaming makes my head hurt. Platinum is A metal. In fact, it is an element. Not a combination of any two things. Just one element. Sure, it can be alloyed like any other metal, but platinum just just and element.

Know what else is just an element? Palladium. Another, pure, singular, transition metal element. Not any combination of other things.

Rutheium - element. Rhodium - element. These are not "types of platinum". They are a completely seperate elements that are at times alloyed with others. Just like we alloy Nickel with Steel, but that doesn't make Nickel a type of steel, even if we continue to call the end product "steel".

Please go take a chemistry class. Please.
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Science is fun, 18 Feb 2010 @ 5:53am

Re: Re: You Can'.t Make Up This Stuff
Please take a look at the periodic table
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Jimba, 18 Feb 2010 @ 5:54am

Re: No, just.. No.
More accurately - they are members of the "platinum group" - a set of metals with similar properties, all near eachother on the periodic table.

To recap - they are all "types of platinum metals" not "types of platinum" Pt is 'A' metal. The "platinum group" is 6 metals.
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Marvin T. Martian, 18 Feb 2010 @ 6:09am

Where can I get some Illudium for my Q-36 Explosive Space Modulator ?
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Anonymous Coward, 18 Feb 2010 @ 6:23am

Re:
Stop by Pepp Boys they usually have a spare flux capacitor for a Delorean DMC-12. If you crack on of them open they are chock full of Illudium
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Anonymous Coward, 18 Feb 2010 @ 6:42am

Re: Re: You Can'.t Make Up This Stuff
Helium is not just A gas, Helium is a member of the noble gases. Good thing it was not named Noble, because that would be confusing.
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yozoo, 18 Feb 2010 @ 7:32am

Cash4Gold
Comeon with a name like that did we really need whistleblowers to tell us they were unethical scam artists.
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Anonymous Coward, 18 Feb 2010 @ 7:37am

Re: Re:
Thats not Illudium, its Unobtainium, which is nearly twice as rare (but oddly only half as valuable)
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Anonymous Coward, 18 Feb 2010 @ 8:26am

platinum - symbol Pt 78 on the periodic table.
palladium - symbol Pd 46 on periodic table

If you're going to claim platinum and palladium are "the same metal" simply because they are vertically aligned on the periodic table, that also means you're saying calcium and magnesium are the same (not to mention nitrogen/phosphorus or your apparent confusion between oxygen and sulphur (which must lead to some interesting scuba diving sessions!))
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Anonymous Coward, 18 Feb 2010 @ 8:51am

Re: Re: You Can'.t Make Up This Stuff
Next, platinum is not a metal. Platinum is a family of metals. Palladium is a member of the platinum family. So you can't do anything with 'palladium or platinum'. You'd just be doing something with platinum.

Platinum is a transition metal in Group 10 of the periodic table of elements. Its chemical symbol is Pt and it has an atomic number of 78. Platinum bullion has the ISO currency codes of XPT and 962.

Palladium is also a transition metal in Group 10 of the periodic table of elements. Its chemical symbol is Pd and it has an atomic number of 46. Palladium bullion has ISO the currency codes of XPD and 964.

Platinum, palladium, rhodium, ruthenium, iridium and osmium form a group of elements referred to as the platinum group metals. The group is simply named after one of its members, platinum, but this in no way means that the other members are forms of platinum even though they share some similar characteristics. Each is a separate element.
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Tom Landry (profile), 18 Feb 2010 @ 9:08am

As bad as Cash4Gold is, its one of those instances where that if people are stupid enough to send their valuables in the mail to some company expecting a fair shake then they deserve what they get.

Selling gold is as easy as picking up the phone and calling area pawn shops, jewelry stores that buy gold etc. You ask what they're paying per pennyweight of whatever your selling (14k, 10k, 18k, etc) and you go with the highest payer. An honest buyer will usually take between 5-10% of the total value based on what ever the market is paying that day.
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Tom Landry (profile), 18 Feb 2010 @ 9:20am

Re: Re: You Can'.t Make Up This Stuff
The point of alloying gold with other metals is to make it hard enough to wear.

what about Portuguese gold Rose? That stuff is essentially pure (correct?) and it seems to stand up as well as any other jewelry.
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Anonymous Coward, 18 Feb 2010 @ 9:42am

Re:
As bad as Cash4Gold is, its one of those instances where that if people are stupid enough to send their valuables in the mail to some company expecting a fair shake then they deserve what they get.

Kind of like "she deserved to get raped because of the way she was dressed", huh?
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Rose M. Welch (profile), 18 Feb 2010 @ 10:15am

Re:
Not the 'same metal', the same type of metal, from the same family, called the platinum family. Every member of the platinum family is a kind of family, just like your brothers and sisters (assuming you have any) are different, but of the same family. Claiming that they're totally different is like claiming that you and your siblings are genetic strangers.
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Rose M. Welch (profile), 18 Feb 2010 @ 10:22am

Re: Re: Re: You Can'.t Make Up This Stuff
So far as I know, Portugal doesn't have any magic gold that's different from anyone else's gold. (If it were different, it wouldn't be gold.)

If they do offer 24k products, then no, it does not wear 'like everything else', if 'by everything else', you mean the standard 10k - 18k gold that's worn in most of the world.

Some countries do tend to use higher karats of gold, and some use lower (8k gold in Europe, really), but the softer it is, the more damage it takes. Don't believe me? Go purchase a 22k ring and wear it every day, and see how beat up it is at the end of the week. Imagine setting a diamond in that and then whacking it on something, as people do every day.

In a 14k ring, you're fine. Every few years, you need to have your prongs retipped or your stones tightened, but no problem. In a 22k ring, you're looking at maintenance every few months, minimum. My store wouldn't offer a warranty on that purchase, but would be happy to charge you for the maintenance. Of course, we would honestly tell you what to expect before you made the purchase...
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Rose M. Welch (profile), 18 Feb 2010 @ 10:27am

Re: Re: Re: You Can'.t Make Up This Stuff
Sure, 950 platinum and palladium are different, but when you're discussing jewelry, and you say the word 'platinum', you're referring to the family, not the element.

You see, 950 platinum (the oldest and most popular platinum jewelry metal) isn't purely one element. It's a combination of two members of the platinum family, hence the designation 950 platinum, and the habit of referring to the metals as 'platinum'.

People don't wear jewelry made 100% of PT. They wear jewelry made of a mix of metals from the platinum family, hence my assertion that platinum isn't one metal, it's multiple metals. It is, when it's used in jewelry.
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Rose M. Welch (profile), 18 Feb 2010 @ 10:27am

Re: Re: Re: You Can'.t Make Up This Stuff
Sure, 950 platinum and palladium are different, but when you're discussing jewelry, and you say the word 'platinum', you're referring to the family, not the element.

You see, 950 platinum (the oldest and most popular platinum jewelry metal) isn't purely one element. It's a combination of two members of the platinum family, hence the designation 950 platinum, and the habit of referring to the metals as 'platinum'.

People don't wear jewelry made 100% of PT. They wear jewelry made of a mix of metals from the platinum family, hence my assertion that platinum isn't one metal, it's multiple metals. It is, when it's used in jewelry.
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Rose M. Welch (profile), 18 Feb 2010 @ 10:27am

Re: No, just.. No.
Sure, 950 platinum and palladium are different, but when you're discussing jewelry, and you say the word 'platinum', you're referring to the family, not the element.

You see, 950 platinum (the oldest and most popular platinum jewelry metal) isn't purely one element. It's a combination of two members of the platinum family, hence the designation 950 platinum, and the habit of referring to the metals as 'platinum'.

People don't wear jewelry made 100% of PT. They wear jewelry made of a mix of metals from the platinum family, hence my assertion that platinum isn't one metal, it's multiple metals. It is, when it's used in jewelry.
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Rose M. Welch (profile), 18 Feb 2010 @ 10:28am

Re: No, just.. No.
Sure, 950 platinum and palladium are different, but when you're discussing jewelry, and you say the word 'platinum', you're referring to the family, not the element.

You see, 950 platinum (the oldest and most popular platinum jewelry metal) isn't purely one element. It's a combination of two members of the platinum family, hence the designation 950 platinum, and the habit of referring to the metals as 'platinum'.

People don't wear jewelry made 100% of PT. They wear jewelry made of a mix of metals from the platinum family, hence my assertion that platinum isn't one metal, it's multiple metals. It is, when it's used in jewelry.

Please, take a jeweler's course.
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Anonymous Coward, 18 Feb 2010 @ 11:43am

Re: Re:
Every member of the platinum family is a kind of family, just like your brothers and sisters (assuming you have any) are different, but of the same family.

Guess what? They're all made up of neutrons, protons, and electrons too. Hate to tell you this, but that doesn't make them the same thing.

Claiming that they're totally different is like claiming that you and your siblings are genetic strangers.

Claiming that they're totally different

So who said that? As said above, they have similarities, but that doesn't make them the same thing.

is like claiming that you and your siblings are genetic strangers.

Claiming they are the same thing is like claiming that my relatives and myself are all the same person.
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Rose M. Welch (profile), 18 Feb 2010 @ 1:15pm

Re: Re: Re:
Sure, 950 platinum and palladium and rhodium, etc., are different, but when you're discussing jewelry, and you say the word 'platinum', you're referring to the family, not the element.

You see, jewelry made from 950 platinum (the oldest and most popular platinum jewelry metal) isn't purely one element. It's a combination of two members of the platinum family, hence the designation 950 platinum, and the habit of referring to the metals as 'platinum'.

The writer was talking about the metals in platinum or palladium jewelry and I explained that for jewelry purposes, those metals were the same thing.

People don't wear jewelry made 100% of PT. They wear jewelry made of a mix of metals from the platinum family, hence my assertion that platinum isn't one metal, it's multiple metals. It is, when it's used in jewelry.

For an additional clue, look on the inside of the ring. Unless it's a custom piece, it should say PLAT or 950, not PT. PLAT means platinum family, and 950 most commonly means 950 parts PT and 50 parts PD, although other combinations are available. It might even say Pt950Co50 or Pt950Pd50, and tell you what it's alloyed with.
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Arborlaw (profile), 18 Feb 2010 @ 2:24pm

"in suing for breach of contract, the company..."
Quibble:

"...in suing for breach of contract, the company was effectively admitting that what the whistleblowers said was true rather than false."

I don't agree. It is probably wiser as a legal strategy to bring a suit for breach of contract, even if a suit for libel or slander would win. These involve proving different issues. If a written employment contract has a 'gag rule' in it forbidding the discussion of disclosed information outside of the employment relationship, then it will be much easier to prove breach of contract than it will to prove libel or slander. Truth is a defense to libel or slander...but is no defense if you have a duty not to discuss an issue in the first place.

Carol Ruth Shepherd, Attorney
Arborlaw PLC
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Auto Movers, 18 Feb 2010 @ 6:17pm

ethics
I live in Florida and when I see commercials from companies like Cash4Gold I always asked myself, how do they protect themselves from claims about them falsifying claims and low and behold I found out I guess they can't really. It is unfortunate that people are losing all rules of ethics in business, the same issues are prevalent in the auto transport industry and it is sad.
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Anonymous Coward, 18 Feb 2010 @ 6:18pm

Re: "in suing for breach of contract, the company..."
Is the employee who signs such an agreement bound to said agreement in the event that the employee witnesses an illegal activity during work?

and then there is the infamous - I was just following orders
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Nick, 26 Apr 2010 @ 2:22pm

trust
www.goldbuying.com
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Latest Sale, 16 Jan 2015 @ 2:45am

Copper Earrings
I've heard about this Cash4Gold in the news. I never though that they are really a scam. They could have just used a different business model like selling copper earrings then they could have profited right now and away from those lawsuits.
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