Golden Opportunity or Rip Off?
PHILLIPS: With gold prices near historic highs a lot of us are sorting through jewelry boxes and under couch cushions looking for those forgotten pieces of the precious metal, but if you're thinking about mailing your gold in for cash, you may be disappointed or downright infuriated. CNNMoney.com's Poppy Harlow shows us why.</s>UNIDENTIFIED MALE: I can get cash for this gold medallion.</s>POPPY HARLOW, CNNMONEY.COM (voice-over): Their ads are pervasive, but some cash for gold customers say they're getting a raw deal.</s>FRANK POINDEXTER, CASH4GOLD CUSTOMER: When they slap you in the face with an absurd amount.</s>UNIDENTIFIED MALE: A golden opportunity to be fleeced.</s>HARLOW (on camera): There are just a lot of people that are selling their gold right now and there are some people that say they're getting ripped off. There's actually a class action lawsuit against "Cash for Gold" right now and they invited us down to their headquarters here in Florida. So we came and we can't show you the outside of the building for security reasons, but we really wanted to come in and see exactly what was going on.</s>UNIDENTIFIED FEMALE: I'll make sure that everything here is what I received.</s>HARLOW: The gold is tested.</s>UNIDENTIFIED FEMALE: We just simply scratch lightly.</s>HARLOW: Appraised.</s>UNIDENTIFIED MALE: We add it up.</s>HARLOW: And an offer is made and customers have 12 days to decide whether or not to accept it.</s>UNIDENTIFIED MALE: And we'll get about 1800 degrees.</s>HARLOW: If they do, their gold is melted down.</s>UNIDENTIFIED MALE: We melt constantly.</s>HARLOW: "Consumer Reports" finds mail-in companies including Cash for Gold sometimes pay out as little as 11 percent of the gold's value. (on camera): I think some concerns are whether they're valid or not that maybe more gold is getting processed here that someone sent in than they're getting paid for.</s>JEFF ARONSON, CEO, CASH4GOLD: I know exactly what comes in is weighed up, is a value is assigned to it right from the computer. My people don't make more money off of it.</s>HARLOW (voice-over): Cash4Gold says it pays 20 percent to 80 percent of the gold's value, but that's not what Frank Poindexter claims he got.</s>POINDEXTER: About a week and a half, I think, I sent the package off to them with the gold in it I received a check.</s>HARLOW (on camera): How much for? How much was the check for?</s>POINDEXTER: I was astounded. It was for 15 cents.</s>HARLOW: 15 cents.</s>POINDEXTER: 15 cents.</s>HARLOW (voice-over): 15 cents for what he says was more than a dozen pieces of gold appraised at roughly $200 bucks. But Cash4Gold's internal documentation says just this single gold earring was in Frank's packet. (on camera): Are you saying he lied to you?</s>HARLOW: I'm just telling you the facts. (voice-over): In the end Cash4Gold settled with Frank for $150. (on camera): And you know, Frank Poindexter is not alone. He's joining that lawsuit against Cash4Gold, which alleges among other things that the company sometimes melts down the gold before the 12- day return period has ended and sometimes blames the post office for losing items in the mail.</s>ARONSON: The class action is merit less. There are three named complainants on the class action suit. Three.</s>HARLOW: After numerous complaints about several companies New York Democrat Anthony Weiner introduced the Gold Act, pushing for more stringent regulation of the industry on a national scale.</s>REP.  ANTHONY WEINER (D), NEW YORK: Basically when you put that gold in that envelope you're sending it off to the wild west.</s>HARLOW: And Kyra, if the Gold Act becomes law, consumers would have to accept the offer for their gold before it is melted down. Companies that don't comply, they would pay a fine. Also it would make companies insure any jewelry they send back to consumers are the same value that consumers inserted out when they mailed it in. Now, in Florida where we went here, there are stricter regulations and Cash4Gold says they worked with Florida to make these stronger laws. This would make those and others on a national scale, Kyra. But it's really a case of buyer beware and seller beware, rather not buyer.</s>PHILLIPS: There you go. But in our meeting we were thinking OK, who would trust a company - who would want to send in gold or pieces of jewelry that could get stolen and they could say they never got it and they could disappear? I mean, what's the reason for doing this? Just because it's easier to do that way? I mean, there's gold shops all over the place, you can take your stuff in and sell it.</s>HARLOW: Yes, there are but Cash4Gold has a million customers, Kyra. So people are doing this. And the issue here is they have advertised that they offer more. You skip the middle man and mail it right in. They say they offer more. That's what some people say they get more. Other people say they don't. I think the bottom line here is you got to follow these things. You have to shop around like we did. We hit the streets of New York and we tried to sell the same gold necklace and we got a huge range of offers. You have to know what your gold is worth. 14 karat gold and 24 karat gold, they are very, very different and they're worth a lot different in value than each other and you have to do your research on these companies. You got to go to the Better Business Bureau or your attorney general's office or you will really, really could get ripped off. So we're going to keep an eye on this class action law suit. Cash4Gold again says they did not do anything wrong. We'll keep you posted on what happens.</s>PHILLIPS: Got it. Thanks so much, Poppy. Scam or not, these ads are tempting. We want you to know, what would it take for you to trade in your gold for cash? Go to my blog, CNN.com/Kyra. Post your comments. I'll read some of them later this hour. Health care reform. The going gets tough and the president gets going. We're going to tell you where he's traveling and why. Plus two students who have something to say about health care live from the CNN NEWSROOM.