Markets Wired

The Federal Trade Commission today told the U.S. House Subcommittee on Commerce, Trade, and Consumer Protection of the Committee on Energy and Commerce that it supports proposed legislation designed to protect cash-strapped consumers who sell their jewelry and precious metals to online buyers. The FTC also supports another piece of legislation that would help consumers who want to avoid buying products containing even small amounts of fur.

Jim Kohm, Associate Director of the Enforcement Division of the FTC’s Bureau of Consumer Protection, testified that the FTC supports the proposed Guarantee of a Legitimate Deal Act, which would strengthen the FTC’s ability to protect financially-stressed consumers. According to the testimony, the FTC has begun to see complaints from consumers who are seeking to make ends meet by selling gold jewelry, watches, and other family heirlooms containing precious metals. Consumers complain that some online jewelry buyers provide a price quote only if asked. In some cases, consumers submit their items and receive payment only after buyers have melted their items into their raw form. Once that happens, dissatisfied consumers have limited recourse.

The proposed legislation would make sure that consumers have a chance to consider and reject a specific offer to buy their precious metals before an online purchaser melts or resells the items. It also would require businesses that offer to buy consumers’ jewelry or precious metals to insure items they ship back to consumers who decline their offers. In addition, the measure would give the FTC the authority to seek civil penalties, which would serve as a powerful deterrent and make it easier for the agency to take action against buyers who violate the law.

The FTC testimony also supports legislation concerning the FTC’s Fur Rules, which help consumers comparison shop by requiring disclosures on labels for fur products. The proposed Truth in Fur Labeling Act would eliminate the FTC’s discretion to exempt some products from disclosure if they contain only small amounts of fur. The measure could benefit a growing number of consumers who would prefer not to buy real fur, or who might object to certain types of fur, even in small amounts.

The Commission vote authorizing the testimony was 5-0.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(HouseTestimony)
(FTC File No. P104802)