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Cash4Gold Sues Consumerist.com Over Investigation

Gold buyer already engaged in lawsuit with former employees

September 1, 2009

Cash4Gold, which bills itself as the "World's #1 Gold Buyer," recently sued Consumerist.com by appending the consumer-focused website to existing lawsuits against two former employees. The employees, Michele Liberis and Vielka Nephew, are accused of defamation and disclosing confidential information about the company in public statements and in Liberis' post about Cash4Gold on a consumer-complaint site. That site, ComplaintsBoard.com, was also added to the suits.

The legal action against the Consumerist.com stems from its post last February titled "10 Confessions of a Cash4Gold Employee," which was part of the site's ongoing coverage of the company. The post was based on comments that Liberis, who formerly worked in C4G's customer service department, had submitted anonymously to ComplaintsBoard.com describing how Cash4Gold manages to pay customers a fraction of what their gold is worth.

In its advertising, the Ft. Lauderdale, Florida-based company had promised "top dollar" to people who send in their valuables to be melted down. But in a test conducted with the help of its sister company, Consumer Reports, Consumerist.com found that Cash4Gold offered as little as 11% of the "melt value" of gold necklaces that were submitted for appraisal. "The results reinforce advice we've offered before," the Consumerist.com report says, "which is that consumers should not use these services because the payments they offer are too low. No matter how nice the person is who gives it to you, a bad deal is still a bad deal."

Led by co-executive editors Ben Popken and Meg Marco, the Consumerist.com investigation is the months-long culmination of reporting that includes interviews with former employees Liberis and Nephew, Cash4Gold customers, the Better Business Bureau, the local fire department and the US Postal Service.

"We follow-up on such challenges conscientiously," says Marc Perton, Executive Editor for Online Media at Consumers Union, publisher of Consumerist.com and Consumer Reports. "{S}o we immediately set out to learn whether the company's allegations had merit, both through our own research and through requests to Cash4Gold for more information." The company has declined to cooperate, though, and just this week canceled a scheduled interview with Cash4Gold CEO Jeff Aronson.

The investigation provided support to Consumerist.com's decision to publish the "10 Confessions" post in the first place, and also turned up evidence that supports Liberis' account of certain business practices and working conditions at the firm. But the Consumerist.com also found that Cash4Gold may have made improvements in the time since Liberis worked there last year. For example, Liberis said the firm was shut down temporarily for "health and code violations," a statement the company disputed. Fire department records show that the Cash4Gold location was indeed shut down after a number of violations last year, but that Cash4Gold has accumulated no new violations since moving to a different address earlier this year.

"We're proud of the work that Ben and Meg have done, and we only regret that their report could not include a response from Cash4Gold CEO Jeff Aronson beyond his earlier public comments," Perton said. "We also hope today's post will help lay to rest the idea that blogs don't do investigative reporting."

More complaints

ConsumerAffairs.com has also received a steady stream of complaints charging that Cash4Gold refuses to pay customers the full worth of their goods, or that they claim to have never received the goods at all.

Sherry, of Dundalk, MD, wrote that "I sent my jewelry, luckily I use UPS and was able to track my package and they could not say they did'nt receive it. Argued with several people before they would agree they had my package. Then I refused to accept that they would call me about my jewelry. I insisted they transfer me to who had my jewelry. She was able to describe my things."

"I demanded that they send my things back," Sherry added. "She gave me a quote of 80 dollars much less than all of my things are worth. She said some of my jewelry was 12 karat and some was gold-filled - No it is not. She is sending my things back UPS and I made her give me a tracking number."

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