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.

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Companies: cash4gold, complaints board, consumer reports, consumerist

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Comments on “Cash4Gold Sues Consumerist, Complaints Board Over Reports On Cash4Gold Practices”

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42 Comments
slacker525600 (profile) says:

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.

TW Burger (profile) says:

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.

scote (profile) says:

“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.

Dark Helmet (profile) says:

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….

PrometheeFeu (profile) says:

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…

Michael Kohne says:

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.

Steve R. (profile) says:

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.

Steve R. (profile) says:

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

ChrisB (profile) says:

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.

Brian (user link) says:

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.

Ralph says:

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.

Dark Helmet (profile) says:

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?

Ralph says:

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.

CrushU says:

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.)

Rose M. Welch (profile) says:

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.

Anonymous Coward says:

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.

brent (profile) says:

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.

TW Burger (profile) says:

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!).

A Murphy says:

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 😉

Anonymous Coward says:

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.

JazzEnthusiast says:

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/

stephen jablonsky says:

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….

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