(CN) - Cash4Gold defrauds people by offering to pay fair value for gold jewelry, then repeatedly "loses" the jewelry and claims not to have received it, a class action claims in Los Angeles Federal Court. The class claims Cash4Gold and its corporate parent, Green Bullion Financial Services, claim to have an ironclad 12-day return policy, but often melt the gold they get before the period has elapsed, and tried to silence former employees who "dare to expose the fraud."
Named plaintiffs Elizabeth Kirts and Rachel Bernhardt say Cash4Gold advertises heavily in print, on the Internet and TV, including a "media blitz" during the February 2009 Super Bowl broadcast. Cash4Gold is run out of Pompano Beach, Fla., according to the 65-page complaint, which contains another 77 pages of exhibits.
The ads portray the company as a "professional, fair and truthful company" that efficiently performs appraisals and provides quick cash payments. Cash4Gold claims on its Web site that it is unique "because we own our own refinery. Which means no middlemen and that means more case for you," the complaint states. It also claims that when a customer's package arrives, its contents are photographed, inventoried and treated with the utmost care.
All of these claims are untrue, the complaint states.
When the company does not blame the U.S. Postal Service for losing the jewelry, it delays mailing checks so that they'll arrive after the 12-day return period has expired. And it has a customer service system designed to frustrate customers so that they'll give up trying to get refunds, the complaint states.
cover their items.
"Once the customer sends the jewelry, the company takes it either by 'losing it or by providing low appraisal rate the customer has no choice but to accept due to the expiration of the return period," the complaint said. "In each case the company wins, the customers lose."
The class demands punitive damages for consumer fraud, false and misleading statements and false advertising. They are represented by John Balestriere with Balestriere Lanza of New York, N.Y.
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