American ‘cash 4 gold’ stores to face new regulations?

Feb 14, 2013·Roman Baudzus

The "cash for gold" – or “cash 4 gold” if you prefer – business has been booming in recent years, but such ventures operating in America are facing the prospect of tighter regulation. This may include requirements to register clients' personal data and forward them to local police.

Currently no federal regulations require these stores to register clients' data. Advocates of the registration process argue that those who sell gold in the future will have to at least identify themselves with a valid driver's licence. Their personal data will then be directly transferred to federal officials through a computer system controlled by local law enforcement.

The owners of cash for gold stores do not approve of these measures (unsurprisingly). Not only do they worry about increased bureaucratic costs, but also about loosing future clientele, with potential traders discouraged by the prospect of their private details being entered into a government database. Data registration advocates argue that such measures are needed to combat the increasing trade in stolen gold.

Advertisements often claim that there could be “no better time” to sell old gold and silverware. Sellers are unaware that in times when central banks are printing record amounts of new money and with much economic uncertainty still abound, owning gold and other precious metals is a good way of preserving wealth.

Past reports show that the typical clientele of cash for gold stores usually sell precious metals in order to raise cash to cover outstanding bills. Those who oppose forwarding data to the authorities see these measures as part of a government scheme to gain a complete overview of all buying and selling activities in the non-banking sector. Many gold store owners argue that these regulations are targeting the wrong sector, as the big guys – in this case the banks – can do as they please while the small guys always get the beating.

Those who support stronger controls on this market argue that forcing cash for gold stores to record and forward their clients' data will not lead to noticeable problems for these businesses. The notion that these measures will help uncover gold thefts remains questionable.

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