Minister Dunkley: Regulating “Cash For Gold”

March 10, 2014

Government is considering legislation pertaining to the “cash for gold” industry, Minister of National Security Michael Dunkley said today [Mar 10] in the House of Assembly.

Minister Dunkley said, “Honourable Members will be aware of the recent growth in the trade of ‘cash for gold’ in Bermuda. Presently, Gold Standard Bermuda is the main operation in this area with other, small jewelers similarly engaged in a trade of cash for gold.

“Driven by economic circumstances numerous individuals have taken to trading their unwanted gold for cash at these outlets. Save for an unwritten ‘understanding’ between Gold Standard Bermuda and the Bermuda Police Service [BPS], the trade is not specifically regulated.

“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,” continued the Minister

“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.

“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.

Minister Dunkley’s full statement follows below:

Mr. Speaker, I am pleased to signal an important policy consideration under review by the Ministry of National Security.

Mr. Speaker, Honourable Members will be aware of the recent growth in the trade of “cash for gold” in Bermuda. Presently, Gold Standard Bermuda is the main operation in this area with other, small jewelers similarly engaged in a trade of cash for gold.

Driven by economic circumstances numerous individuals have taken to trading their unwanted gold for cash at these outlets. Save for an unwritten “understanding” between Gold Standard Bermuda and the Bermuda Police Service (BPS), the trade is not specifically regulated.

Honourable Members will also recall a recent publicized criminal case in which a defendant had stolen jewellery from his family, traded it for cash and managed to do so in an incredibly short period of time to the prejudice of his victim to whom the gold was not unwanted but highly valued.

Mr. Speaker, Gold Standard Bermuda and the BPS considered this occurrence to be a “one-off” on the basis that the deposit of the gold by the defendant coincided with a weekend and the gold was incorporated into a prepared shipment destined for melting and that the normal waiting time for such a process was not applied. However, this case demonstrates to some, the argument for the introduction of regulation of this trade.

Mr. Speaker, presently Gold Standard applies the following standards to the trade of cash for gold:

(i) picture ID is required to make the sale of gold for cash, whilst some additional contact information “may also be required” for the company’s records;

(ii) cooperation with the Police is indicated and the company advises that it will only purchase gold from “authorized sources”, which is not defined;

(iii) a five (5)-step process is outlined for the trade of cash for gold with Step 5 indicating “If you accept your offer, you can be on your way with cash in hand in minutes…” which would appear to be contrary to the “understanding” with the BPS for a suitable waiting period before finalizing any trade.

Mr. Speaker, 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.

Mr. Speaker, 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. Reflecting on the passage of the legislation the Barbados Attorney General said: “we want to take the cash out of cash for gold. It should serve as an additional deterrent to those individuals who are now involved in this illegal trade.”

Elsewhere, Mr. Speaker, in a June 2012 Report, the Irish Department of Justice and Equality considered the cash for gold trade and recommended the suspicious transaction reporting regime applicable under their money laundering legislation be extended to cash for gold outlets.

Additionally, the Report observed that controls could relate to the identification of the seller, information on the source of the valuable and its identification, a requirement to retain the item at the outlet, a requirement to record the transaction and to provide access to items and records as required by law enforcement.

In the United Kingdom, police forces across the country have called for the regulation of the cash for gold trade, specifically that transactions are recorded and the identification of the seller be registered.

This call was most recently made in response to a spate of burglaries in 2012 motivated by a seasonal increase in Asian families displaying their gold jewellery in connection with some cultural festivals and a traditional spring spike in marriages for which dowries are paid. Some gangs have been active in the Thames Valley area and the Midlands and have targeted this greater availability of gold.

Mr. Speaker, 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.

Mr. Speaker, 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.

Thank you, Mr. Speaker.

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  1. Dockyard Lackey says:

    About time! This might put the breaks on some of the burglars who deal in stolen gold and jewelry.

  2. Thank you says:

    Thank you, Thank you!! BAN CASH FOR GOLD!!

    • Mile High Club says:

      Why Ban it? Do what they do in other areas. A copy of a valid photo ID is taken from the seller. All gold sales reported to police and checked against stolen reports. No item can be melted, sold, traded or shipped overseas for 60 days.

      • Really? says:

        All common sense steps. Especially the part about not being melted or otherwise disposed of for 60 days.

        I have a question on the legality of these type transactions. Considering that if you or I were to purchase jewelery which happened to turn out to be stolen, we could, and probably would be prosecuted for “receiving stolen property”, how is it all well and good for these businesses to do the same thing?

        We all know that the real reason that they make such an effort to melt and ship the gold overseas in such a hurry is that the operators recognize that there IS and will continue to be a portion of what they purchase that is stolen.

        As to the case mentioned where the gold was supposedly melted quickly being a “one off” thing, save it! I know for a fact that is not true. It happens more often than not.

        • TESTI says:

          It is only a crime if you purchased or accepted the items knowing that they were stolen. If you purchased the items at fair market value and had no reason to suspect that they were stolen the items would likely just be taken from you and returned to the owners and you would be out of pocket.

          • Really? says:

            You are absolutely correct, because we all know that we are treated as innocent until proven guilty right? SMH. As to not suspecting foul play on the part of the seller, explain to me how a school age child walks into a cash for gold outlet with a $3000 bracelet and receives $1200 cash? Doesn’t sound like “fair market value” or that there was no reason for the operator to be suspicious to me.

  3. Y-Gurl says:

    Better late than never….I guess so how about in part of the proposed regulation they (cash for gold) be required to keep the goods in Bermuda for a period of 21 days to allow any thefts to be discovered and not allow them to courier the goods out of Bermuda the same or following day. Also some clarification on what they are licensed to do would be nice, they give you a small sum of cash for gold weight then sell it to a 3rd party in the US….we get it, they offer loans based on someone leaving a bag or watch with them….are they a pawn shop?, they also give un secured loans…are they a bank?

    • Mile High Club says:

      I agree Y-Gurl, but I say longer than 21 days is needed. I know several people that don’t travel often , but when they do, they go for 3 weeks or longer.

  4. Common Sense says:

    What the Minister has stated makes good sense and should be acted on ASAP. I also agree with Y-Girl’s suggestion that any gold traded in must be required to be kept in Bermuda for a minimum period of 21 days.

    I would also suggest that not only the gold be photographed but also the person trying to sell it. If the person is genuine the photo goes nowhere and his or her privacy is not invaded. But if the person selling is a thief, or a receiver of stolen goods, then the photo can be handed over to the Police for a criminal investigation.

  5. Independent says:

    I support the minister on this. Many of Bermudians gold has been taken for this specific reason, so well done sir.

  6. RJ says:

    This Island is already drowning in regulations. Another burden for businesses.

    • Greatnews! says:

      Obviously some one who has never had their gold stolen and sold and shipped out within two days. Sometimes regulations are needed or would you like it to be the wild west all over again?

      I never understood how these cash for gold places can say they are careful on what they buy when a 20ish year old comes in with like thousands of dollars of gold, coins, bracelets and yet it never raises a red flag with these places at all to even hold those items for a significant amount of time. It’s long overdue for official regulation of these kinds of business, if you ever tried to deal with any of them in getting back your stolen goods you’d know it’s like getting teeth pulled!

    • lucky 7 says:

      RJ- is that short for Real Jerk? You’re comment is so ignorant, Michael Dunkley is trying to help everyone. Or are you one of the thieves who is now pissed off?

  7. I agree with regulating this but the other side of this is if they cannot get an easy way to sell the items they will sell it on the streets??