Cash4Gold Sues Consumerist, Complaints Board Over Reports On Cash4Gold Practices

from the how-much-for-that-gold-Streisand-Effect? dept

Earlier this year, we wrote how odd it was that the company Cash4Gold (made famous by its cheesy late night commercials) was threatening to sue bloggers for defamation for merely repeating and linking to a Consumerist article that quoted a former Cash4Gold employee about allegedly underhanded tactics used by the company. The defamation threat was odd for a variety of reasons. First, Cash4Gold itself was talking about these same allegations on its own website (which is actually the best way to deal with them: respond to them, rather than trying to silence them). Second, going the legal route only guaranteed much more attention to the issue and questions surrounding Cash4Gold's activities. Third, it made little sense to threaten someone who was merely summarizing what others were saying.

While Cash4Gold apparently backed off such threats, it did go forward and get an injunction against the former employee to stop her from "publishing any more confidential, proprietary information, and any defamatory information on the internet." I like how it mixes in confidential, proprietary and defamatory information -- so now we don't know which the original reports were. Were they defamatory lies? Or were they just confidential, proprietary information?

Either way, with that injunction, the company contacted Complaints Board -- the site where the employee originally put forth the allegations -- and Consumerist, who also posted on the allegations, and demanded they remove the posts. Of course, with no legal order, both sites refused to do so. In response, Cash4Gold has now sued both sites, once again guaranteeing that much more media attention is paid to alleged claims of underhanded business practices by the company.

Of course, rather than backing down, Consumerist is fighting this and has posted a lengthy and detailed article reviewing the original claims, backing many of them up with additional reporting details and pointing out that this is an ongoing news story that it believes it has every right to write about. Once again, though, we're left wondering why Cash4Gold would do this. All it's doing is drawing that much more attention to the claims against it.

The Citizen Media Law Project post above details two additional factoids about how Cash4Gold's lawyers are trying to get around the rather obvious (it seems) Section 230 safe harbors that almost certainly protect Complaint Board. First, they claim that because Complaint Board edited the title of the post, they're no longer just a service provider, but "created, developed and published." That seems like a long shot. Perhaps more likely to succeed is a reference to the recent Barnes ruling, where Section 230 was tossed out the window after the company promised to delete the content in question (and then didn't). Of course, it's not clear if Complaint Board did, in fact, promise that, but Cash4Gold claims that it did.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    icon
    ChurchHatesTucker (profile), Sep 2nd, 2009 @ 11:15am

    Markets

    "Once again, though, we're left wondering why Cash4Gold would do this. All it's doing is drawing that much more attention to the claims against it."

    Yeah, but the kind of people reading this aren't going to be sending their gold off in the frakin' mail.

    Different strokes, and all that.

     

    reply to this | link to this | view in thread ]

  2.  
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    Ima Fish (profile), Sep 2nd, 2009 @ 11:20am

    This story has been given wide attention. Not only has it been on the Consumerist. It also made the front page of Digg. Plus it was covered by both Reuters and CBS MoneyWatch.

    If Cash4Gold wanted to bury this story, it's taken an asinine approach to reach that goal.

     

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  3.  
    icon
    Thomas (profile), Sep 2nd, 2009 @ 11:30am

    Digg

    There's your Cash4Gold crowd ..

     

    reply to this | link to this | view in thread ]

  4.  
    icon
    Robert Ring (profile), Sep 2nd, 2009 @ 11:35am

    It's amazing how short-sighted companies can be. Forgo reputation in favor of a lump sum right now.

    This is of course ignoring the equally idiotic fact that their lawsuit is likely to fail.

     

    reply to this | link to this | view in thread ]

  5.  
    icon
    slacker525600 (profile), Sep 2nd, 2009 @ 11:56am

    cash for gold

    somebody in my office got sick of watching the commercials trying to buy and sell gold on msnbc and decided to see how much money you would lose if you were to use the advertised services to buy and sell back gold

    "At the time we ordered, I believe gold was about $930 an ounce so our coin was worth $93.
    For the privilege of participating in this investment opportunity 866-MINT-GOLD charged us only $125.
    Unfortunately, they had only one shipping/insurance option, that was and additional $31 for $156 total.

    The good people at cash4gold.com wouldn't dream of taking more than what they so richly deserve for their hard work and returned us nearly all of the $93 the coin was actually worth. They wrote us a check for $19.49.

    We lost $136.51...on a coin worth $93."

    just in case there were any questions about details like that.

     

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  6.  
    identicon
    Charlie Potatoes, Sep 2nd, 2009 @ 12:02pm

    My Site, Coming Soon

    My new site, opening soon, will be www.cash4preciousgemstones.com Send me your diamonds and emeralds, and I'll send you cash. Is this a great country or what?

     

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  7.  
    identicon
    scote, Sep 2nd, 2009 @ 12:14pm

    "I like how it mixes in confidential, proprietary and defamatory information"


    Actually, that isn't contradictory. Something can be true and defamatory--fortunately, defamation claims nowadays generally require the defamation to be **false** and defamatory. In it's filings, C4G claimed the ex-employee's revelations were **false** and defamatory **and** proprietary and confidential. Now that is a contradiction.

     

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  8.  
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    Dark Helmet (profile), Sep 2nd, 2009 @ 12:23pm

    Sigh

    "Consumerist is fighting this and has posted a lengthy and detailed article reviewing the original claims, backing many of them up with additional reporting details"

    Separately, having read the claims, first hand employee accounts, and additional circumstantial evidence, I think it's an incredible amount of restraint by the people who sent Cash4Gold their valuables that they haven't, you know, risen as one and slayed these idiots....

     

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  9.  
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    PrometheeFeu (profile), Sep 2nd, 2009 @ 12:35pm

    an injunction against the former employee to stop her from "publishing any more confidential, proprietary information, and any defamatory information on the internet."

    Does this even have any effect? I mean, publishing defamatory, proprietary and confidential information is already illegal I believe. So the former employee is simply being told to not do something which he is already required not to do. Unless the injunction mentions a specific information, the former employee could just ignore the injunction and keep publishing the information as long as it is not confidential, propriety or defamatory... Then, if a court asks him, he'll just have to say that the information he is publishing is none of these things...

     

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  10.  
    identicon
    Michael Kohne, Sep 2nd, 2009 @ 12:35pm

    Those who forget the past...

    Consumerist is owned these days by Consumer Reports. Has anyone sent the cash4gold guys the documentation from the last time someone tried to silence CR? I'm thinking of the roll-over Suzuki debacle.

    If I remember correctly, after may years of litigating, Suzuki was roundly stomped on and forced to pay for everything. And CR never backed down. Ever.

     

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  11.  
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    Steve R. (profile), Sep 2nd, 2009 @ 12:40pm

    15% on the Dollar

    One of the news programs ran a short expose on "Cash for Gold". I don't remember the news program or the company being "featured".

    Anyway, the news program bought a gold pendent for $70 (retail). The cash they received from sending the pendent in to one of these "cash for gold" companies was $3.00. The news company in explaining this disparity pointed out that the value of the pendent, besides the $20 in gold, was in the marketing, styling, packaging etc.

    Sounds reasonable until you realize that the reporters in their expose neglected highlighting that the fact that you where only getting $3.00 in cash for $20 in gold. So the "gold for cash" offer was only paying you cash for 15% of the actual gold value. I guess this points out how chicken-liver our reporters have become.

     

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  12.  
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    Ima Fish (profile), Sep 2nd, 2009 @ 12:44pm

    Re: Those who forget the past...

    "Has anyone sent the cash4gold guys the documentation from the last time someone tried to silence CR?"

    My guess is that the people/attorneys behind Cash4Gold have no clue that the Consumerist is owned by Consumer Reports. They probably think it's some random blog run by an out-of-work loser.

     

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  13.  
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    ChrisB (profile), Sep 2nd, 2009 @ 12:45pm

    Isn't there a saying...

    Doesn't it go "There is no such thing as bad press" ?

    I mean wouldn't their advertising costs go down if their company became a household name? Couldn't this be a company looking to take advantage of the Streisand Effect? In effect have this become such a big deal and have their name become so widely know, then "clean up" their image, and rake in the dough.

     

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  14.  
    identicon
    Scammers -R- US, Sep 2nd, 2009 @ 12:56pm

    Cash4Gold

    If you are stupid enough to put your gold jewerly in a evenlope and send it to some one and expect them to send you cash -4- gold.. Then you deserve to GET RIPPED OFF....

    Wake up AMERICA........

     

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  15.  
    icon
    Chuck Norris' Enemy (deceased) (profile), Sep 2nd, 2009 @ 1:41pm

    New ad campaign

    Cash4Gold (made famous by its cheesy late night commercials)
    A close up of a hand pointing at a computer screen showing the article on the Consumerist website. Then a magical ding and the web page goes blank.

     

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  16.  
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    Steve R. (profile), Sep 2nd, 2009 @ 1:59pm

    Re: 15% on the Dollar

    ConsumerAffairs.com reports: "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."

    Read more: http://www.consumeraffairs.com/news04/2009/09/cash4gold_consumerist.html#ixzz0Pz8CGyPH

     

    reply to this | link to this | view in thread ]

  17.  
    identicon
    Brian, Sep 2nd, 2009 @ 2:20pm

    Don't be fast to judge them

    In this newsroom coverage, the Treasury Department is actually going to use them to liquidate some assets to deal with the rising deficit.

    http://www.youtube.com/watch?v=6JPcimrnXGA

    I think we are unfairly judging Cash4Gold. I also think the US is doing the right thing by liquidating the furniture in the White House.

     

    reply to this | link to this | view in thread ]

  18.  
    identicon
    Ralph, Sep 2nd, 2009 @ 2:21pm

    The quality of Techdirt "news" is severly plummeting

    Mike, you may want to do a little research. Did you know Cash4Gold seems to offer a 12-day return policy, where if the customer doesn't like the offer, they can send the check back and recieve their property back.

    Now, don't get me wrong: I wouldn't use the service, much like I don't play Bingo, Mega Millions or PowerBall. In fact, the last four times in Vegas, I spent a whopping $3.50 at the slots.

    Just because we wouldn't use the service, doesn't mean that there are others who need a quick buck.


    Mike, if you want to whine, you might as well have included a story about Cash Advance/Payday loan companies. Most of those types of outfits charge 300-350% interest, and I'm sure that they have lots of complaints on Consumerist too.

    Must be a slow news day.

     

    reply to this | link to this | view in thread ]

  19.  
    icon
    TW Burger (profile), Sep 2nd, 2009 @ 2:33pm

    Re: My Site, Coming Soon

    When I first saw the ads I thought: "Who would be so stupid as to send precious metals to a stranger and trust them to pay a fair value?". Well, the ads a running more than ever so I suppose there are many morons out there. As long as you have no problems with having absolutely no morality anyone can become rich. Your idea will probably work.

     

    reply to this | link to this | view in thread ]

  20.  
    icon
    TW Burger (profile), Sep 2nd, 2009 @ 2:43pm

    Get a load of the President

    Have a look at the picture at: http://consumerist.com/5349663/the-article-cash4gold-doesnt-want-you-to-read

    Cash4Gold CEO Jeff Aronson looks like a scary henchman character from The Sapranos. He really needs a makeover.

    Oh, and since I have posted the link in my message Jeff Aronson can try to sue me too (or have Tony have me 'whacked' in 'Jersey - Budda Bing!).

     

    reply to this | link to this | view in thread ]

  21.  
    icon
    jjmsan (profile), Sep 2nd, 2009 @ 3:01pm

    Re: The quality of Techdirt "news" is severly plummeting

    Exactly how is this article whining? Yes the cash advance companies do charge interest like that and they do get a lot of complainnts. So what exactly is your point?

     

    reply to this | link to this | view in thread ]

  22.  
    icon
    Dark Helmet (profile), Sep 2nd, 2009 @ 3:31pm

    Re: The quality of Techdirt "news" is severly plummeting

    "Now, don't get me wrong: I wouldn't use the service, much like I don't play Bingo, Mega Millions or PowerBall. In fact, the last four times in Vegas, I spent a whopping $3.50 at the slots."

    Lord, you sound like tons of fun there, Sparky. Any other non-enjoyment habits you want to inform us of?

     

    reply to this | link to this | view in thread ]

  23.  
    identicon
    CrushU, Sep 2nd, 2009 @ 3:55pm

    Re: The quality of Techdirt "news" is severly plummeting

    "Mike, if you want to whine, you might as well have included a story about Cash Advance/Payday loan companies. Most of those types of outfits charge 300-350% interest, and I'm sure that they have lots of complaints on Consumerist too."

    Those are APR interest rates. Which means that yes, if you took a $100 loan and then didn't pay it back, you'd owe $400 at the end of the year. (Well, more, due to compounding.) They're generally meant to be week-long loans at most. If my quick math is right, on that $100 loan you'd pay back $106 after a week. Hardly a scandal.

    I only responded on this because I happen to work with tax software that supports those 'fast refunds' of varying times. Those are actually loans from the bank, repaid by the IRS when they'd actually finish looking at your return and deposit the refund. And those interest rates are around 100-300% as well, but the fees to cover that interest are always a small percentage of the refund, being as how the IRS takes two weeks to actually give you a refund. More if you didn't fill out your return correctly.

    Just wanted to point out the fact that there is no 'scam' by those week-long High Interest loan people. 6% of your money is far and away from 85% of your money. ($106 for a $100 loan vs $3 for a $20 piece of jewelry.)

     

    reply to this | link to this | view in thread ]

  24.  
    identicon
    A Murphy, Sep 2nd, 2009 @ 3:59pm

    Re: The quality of Techdirt "news" is severly plummeting

    One of the claims of the whistle-blower, substantiated by complaints received by the BBB and the state's attorney general's office, is that the checks are dated several days before they are mailed. When the check arrives, for many it is already past their 12-day window to dispute the appraisal.

    Also, @ Dark Helmet: long time reader, first time responder. Big fan of your work ;)

     

    reply to this | link to this | view in thread ]

  25.  
    identicon
    Bradley Stewart, Sep 2nd, 2009 @ 5:42pm

    Son How Many Times Have I Told You

    to pick up your bicycle and all that old gold laying around in the driveway. I'm getting tired of tripping over all that stuff when I come home from work every night! I have always wondered how much gold is laying around in peoples homes.

     

    reply to this | link to this | view in thread ]

  26.  
    identicon
    Anonymous Coward, Sep 2nd, 2009 @ 5:44pm

    Re: Re: The quality of Techdirt "news" is severly plummeting

    phffffft

     

    reply to this | link to this | view in thread ]

  27.  
    identicon
    Ralph, Sep 2nd, 2009 @ 7:46pm

    Re: Re: The quality of Techdirt "news" is severly plummeting

    You're missing the point.

    It is a tax on the stupid, just as sending money in the mail is a tax for the stupid. Just as playing lotto is a tax for the stupid. For my money, I'd rather get something that has an actual return. You call it "non-enjoyment", but my thrill doesn't come by dicking around.

    You seem to have the mentality of the typical Grade-A welfare recipient.

     

    reply to this | link to this | view in thread ]

  28.  
    identicon
    Ralph, Sep 2nd, 2009 @ 7:57pm

    Re: Re: The quality of Techdirt "news" is severly plummeting

    I needed to revise this, because someone just told me about this thing called Wikipedia. Apparently some payday loans become as high as 2000-3000% as interest is re-compounded weekly. I don't know, I just listen to constituents every day and compile the reports.

     

    reply to this | link to this | view in thread ]

  29.  
    icon
    Joe Szilagyi (profile), Sep 2nd, 2009 @ 8:34pm

    The law is broken

    The fact that corporations can sue for defamation in and of itself is the problem.

     

    reply to this | link to this | view in thread ]

  30.  
    identicon
    Anonymous Coward, Sep 2nd, 2009 @ 10:31pm

    You need to find a sense of humor, Mike. If someone sends you a Cash4Gold mailer, you should laugh and put it away.

    Now, the problem I have is that I'm going to have to send Mike Ho his 3-month Employee Of The Month award and hold back your Vacation Travel Certificate. Also, I have to worry about what the other employees think about your leadership style. Geez.

    I really hope you're happy.

     

    reply to this | link to this | view in thread ]

  31.  
    identicon
    Anonymous Coward, Sep 2nd, 2009 @ 10:37pm

    On second consideration, no-one gets anything. Sorry, Mike Ho.

     

    reply to this | link to this | view in thread ]

  32.  
    icon
    Rose M. Welch (profile), Sep 2nd, 2009 @ 11:52pm

    Re: The quality of Techdirt "news" is severly plummeting

    Multiple issues here:

    First, this is not a news site or a 'news' site. Mike is not a journalist and doesn't claim to be. Deal with it or move on.

    Second, they do 'offer' a return policy, but they have a practice of dating checks and then waiting several days to send them out so they arrive too late to get a refund. The BBB dropped them because of it. I have also heard complaints about being the line not being answered, being transferred to nowhere, and flat-out hung up on when called for a refund.

    Third, Cash Advance/PayDay Loan companies operate under very strict guidelines. Cash4Gold *should* operate under similar standards but, apparently does not, as they are being investigated for not following the law when purchasing precious materials.

     

    reply to this | link to this | view in thread ]

  33.  
    identicon
    Mojo Bone, Sep 3rd, 2009 @ 12:43am

    Factoids

    Yet another misuse of the term, "factoid". A factoid is an item that has been repeated in the media often enough to be taken for fact, has a certain quality of truthiness, but is in fact, false.

     

    reply to this | link to this | view in thread ]

  34.  
    identicon
    Anonymous Coward, Sep 3rd, 2009 @ 1:12am

    Re: Re: The quality of Techdirt "news" is severly plummeting

    Rose, I often look to your ideas, but your being a full blown ass.

    First, this is not a news site or a 'news' site. Mike is not a journalist and doesn't claim to be. Deal with it or move on.

    Really? Sounds like something that I've parroted to others since before you started posting here, assuming Rose is your real name. But go on.

    Second, they do 'offer' a return policy, but they have a practice of dating checks and then waiting several days to send them out so they arrive too late to get a refund. The BBB dropped them because of it. I have also heard complaints about being the line not being answered, being transferred to nowhere, and flat-out hung up on when called for a refund.

    Then that seems to be a problem with the return policy at Cash4Gold. Anything else?

    Third, Cash Advance/PayDay Loan companies operate under very strict guidelines. Cash4Gold *should* operate under similar standards but, apparently does not, as they are being investigated for not following the law when purchasing precious materials.

    So are you saying the Government should better regulate these entities?

    I really don't care, Seems like a slow news day.

     

    reply to this | link to this | view in thread ]

  35.  
    identicon
    Anonymous Coward, Sep 3rd, 2009 @ 7:22am

    Re: Don't be fast to judge them

    God I love the Onion, so freaking funny.

     

    reply to this | link to this | view in thread ]

  36.  
    icon
    brent (profile), Sep 3rd, 2009 @ 8:10am

    Re: The quality of Techdirt "news" is severly plummeting

    aren't you missing the point of the entire blog post?? Mike isn't saying it is a scam or it isnt. he isnt telling anyone to use the service or not.

    He's merely pointing out that Cash4Gold is drawing more attention to it's bad PR by choosing to file suits over it rather than to just explain it on its own website and leave it at that.

     

    reply to this | link to this | view in thread ]

  37.  
    identicon
    JazzEnthusiast, Sep 3rd, 2009 @ 5:14pm

    I believe they do explain their company well on their site. they seem to be on top and that only happens when the majority of your customers are happy with the service. i also found this new link on their donation http://www.cash4gold.com/newspr/press-releases/cash4gold-provides-cash-for-the-golden-state-worlds-1 -gold-buyer-donates-to-red-cross-to-help-with-california-wildfire-relief-efforts/

     

    reply to this | link to this | view in thread ]

  38.  
    identicon
    Anonymous Coward, Sep 3rd, 2009 @ 5:25pm

    Re: The quality of Techdirt "news" is severly plummeting

    If you bothered to read the "low-quality news", you would have noticed that the issue Mike highlighted was not the shadiness of the services offered, but their tactic of suing anyone who publicly complains about their service.

     

    reply to this | link to this | view in thread ]

  39.  
    identicon
    Billy, Sep 3rd, 2009 @ 5:34pm

     

    reply to this | link to this | view in thread ]

  40.  
    identicon
    Spanky, Sep 4th, 2009 @ 12:19am

    Overall...

    I always love the posts that blame the victim. There's always a few.

    Personally, I've always believed its the gunshot victim's fault for not moving. Must be a welfare recipient.

     

    reply to this | link to this | view in thread ]

  41.  
    identicon
    stephen jablonsky, Feb 2nd, 2010 @ 7:41am

    Ripped off by cash 4 gold

    isaved all my crap gold and sent it to cash 4 gold , there say it had a slice in the pacage and was stolen on transit, was told on tv it will be insured for a minimum of 500 pound. Ive hurt nowt of them and have just took me for a mug, I say dont deal with them at all because when out go,s wrong there just run....

     

    reply to this | link to this | view in thread ]

  42.  
    identicon
    Brad, Feb 18th, 2010 @ 1:20am

    Complaintsboard number 512 275 6123

    Hi, I found complaintsboard.com number; it's 512 275 6123.

     

    reply to this | link to this | view in thread ]


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