Cash for gold businesses come under scrutiny

Government is considering following the example of Barbados in which it requires dealers to pay for gold by cheque and to have records kept of the seller’s passport or national identification.

This follows on a high profile case in which a resident had some prized-heirloom jewellery and was traded for cash and shipped off the island to be melted in a very short time frame.

Michael Dunkley, Deputy Premier and Minister for National Security said people have been driven by dire economic circumstances to trading their gold for cash at various outlets, the main one being Gold Standard Bermuda.

Mr Dunkley said: “Other jurisdictions have wrestled with the growing “cash for gold” trade and in some cases have sought to regulate the activity. In 2013 Barbados was forced to confront the challenge posed to their tourism industry by the theft of gold jewellery, which targeted their visitors.

“Among the remedies proposed by the Barbados Legislature is the requirement for legitimate dealers to pay for gold received by cheque and to have records kept of the sellers’ passport or national identification.”

The AG of Barbados said by making the businesses pay by cheque, “It should serve as an additional deterrent to those individuals who are now involved in this illegal trade.” 

Mr Dunkley added: “We have consulted with the Bermuda Police Service and the emerging consensus is for a ‘light touch’ manner of regulation for the cash for gold trade. Legislation might most usefully focus on licensing these kinds of businesses, ensuring the proper recording of a seller’s details, including the use of a photo log of the items deposited for trade and a mandated waiting period before the actual disposal of the gold.

“There is also some merit in the Barbados approach of requiring payment by cheque for traded gold as opposed to instant cash.

“The Ministry will consult with those engaged in this trade presently and I expect that in the next session we will see some form of legislation in this area.

“This is an instance where the introduction of some form of regulation will provide a safety net for consumers, assist in any enforcement action taken by the Police and enhance the reputation of the entrepreneurs who strive to run honest businesses in this community.”