Guarantee of a Legitimate Deal Act of 2010
Floor Speech
Mr. WEINER. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days in which to revise and extend their remarks and include extraneous material in the Record.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from New York?
There was no objection.
Mr. WEINER. Mr. Speaker, I yield myself such time as I may consume, and I don't intend to use all of the time. I thank the indulgence of the gentleman from Kentucky both in this debate and during consideration of this bill in committee.
Mr. Speaker, during these difficult economic times, Americans are looking for any way that they can to try to make ends meet. They are taking on second jobs; they are looking through their cupboards, trying to see if there is anything they can sell. Just about any opportunity they can to make a few dollars people are looking for. That is why there has been a great deal of attention paid recently to companies that are advertising very heavily that if you give us your gold and jewelry, we will give you cash for those products.
The problem is that when you put the gold and the jewelry in the envelope and send it to some of these companies, they are finding that consumers are not being treated very well. The Consumers Union and their publication Consumer Reports did a good expose on this, turning out the problems people face. Sometimes they are getting pennies on the dollar for what comes back, but even more difficult are the cases where people don't even agree to the transaction; or finding that since they didn't act fast enough, their gold or jewelry had been melted down, sold off for pennies on the dollar, and they were left with very little recourse.
When Congress found out about this, a hearing was convened in Congressman Bobby Rush's subcommittee in the Energy and Commerce Committee. We heard from victims who had this happen to them. And we also heard from industry groups. There was virtual consensus that more needed to be done to protect consumers. You can have a debate, which perhaps should go on in each household before you engage in one of these transactions through the Internet or through the mail, whether or not you should see a neighborhood pawn broker, a neighborhood jeweler, someone who can give you some actual hands-on advice about these things. But as with so many things with rare jewelry, it's like a lot of other elements of products that consumers don't have a real intrinsic sense of what they should be worth, so they are subject to be taken advantage of.
The act we are taking up today, the GOLD Act, the Guarantee of a Legitimate Deal Act of 2009, makes some changes in the law to give consumers a little bit more weight on their side of the scale, no pun intended. What it would mean is that under this new law a consumer would have to accept or reject the offer before the transaction has been considered complete. Right now there are many companies, including Cash4Gold, the biggest one of them, that will give a finite number of days after which they will simply melt down the gold and consider the transaction completed.
It mandates that the purchasers of precious metals through the mail insure the products and send them back in the same insurance level that they were sent to them for. Let me explain why that's necessary. According to the postal service, we have a large number of people alleging that they would send their gold, say I don't want to do the deal, and mysteriously when the gold was mailed back to them, it disappeared in the mail. And, frankly, it seems more likely than not that the people sending back those shipments never actually did it.
So what we are proposing here is that if someone insures it for $100 going, it gets insured for $100 when it gets sent back as part of the transaction. And it would institute civil penalties for any company that melts down someone's gold without the prior approval by the consumer.
Now, as I said, you can have a debate, and I think that it seems from a lot of the testimony that we took it's good to get a second or a third opinion about the true value, as you might really have some rare exotic piece of jewelry or something that has a high level of gold content; and you may find that when you send it to one of these places, as Consumer Reports found out when they did a study, they found out that the people were only getting on average of between 11 and 29 percent of the value of the gold actually offered back to them.
So you should try to get some advice from an actual person you trust in your community: a jeweler, a pawn broker, and the like.
But also what this finally says is if you are going to go ahead with one of these transactions, if you are going to take a piece of jewelry that you have, put it in one of these prepaid envelopes and mail it off, you are going to continue to have control over the transaction should this law pass. That's why the Consumers Union supports it, the Jewelers Vigilance Council, which is the trade organization that testified. And it's my understanding that even the biggest player in the field that prompted this investigation, Cash4Gold, has said that they support this legislation. And while they have had problems, I want to commend them for doing so.
I reserve the balance of my time.
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Mr. WEINER. I yield myself such time as I may consume.
I want to thank Representative Whitfield for his kind words and for his help in crafting this bill and making it better than what it was first authored, Chairman Rush, who is the subcommittee chairman, and his staff, Peter Ketcham-Colwill, Michelle Ash, and also Yuri Beckelman of my staff and Bertine Moenaff of my staff, who helped do the research, and of course Consumers Union and the Jewelers Vigilance Council, who helped to provide testimony.
I urge my colleagues to vote ``yes,'' and I yield back the balance of my time.
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