[Congressional Record Volume 156, Number 161 (Wednesday, December 8, 2010)]
[House]
[Pages H8105-H8107]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
GUARANTEE OF A LEGITIMATE DEAL ACT OF 2010
Mr. WEINER. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 4501) to require certain return policies from businesses
that purchase precious metals from consumers and solicit such
transactions through an Internet website, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 4501
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Guarantee of a Legitimate
Deal Act of 2010''.
SEC. 2. RETURN REQUIREMENTS FOR PURCHASERS OF PRECIOUS
METALS.
(a) Unlawful Conduct.--It shall be unlawful for any
purchaser of precious metals to--
[[Page H8106]]
(1) sell, transfer to a third party, or refine through
melting or otherwise permanently destroy an item of jewelry
or precious metal before the purchaser of precious metals has
received an affirmative acceptance of an offer to purchase
the item for a specific price from the consumer to whom such
offer was made;
(2) fail to promptly return to the consumer any jewelry or
other precious metal if the consumer declines the offer to
purchase made by the purchaser of precious metals; or
(3) fail to insure any shipment to the consumer of such
jewelry or precious metals in an amount equal to--
(A) the amount the consumer insured the shipment of the
jewelry or precious metals to the purchaser of precious
metals, if the consumer provides the purchaser of precious
metals with proof of such insurance; or
(B) 60 percent of the melt-value of the jewelry or precious
metals, if the consumer does not provide the purchaser of
precious metals with proof of such insurance.
(4) Law Enforcement Exception--Paragraph (1) of this
subsection shall not prohibit the sale or transfer of any
item of jewelry or precious metal to law enforcement agencies
or their personnel.
(b) Definitions.--As used in this Act--
(1) the term ``purchaser of precious metals'' means a
person who is in the business of purchasing jewelry or other
precious metals directly from consumers; and
(2) the term ``melt-value'' means the reasonable estimated
value of any item of jewelry or precious metal, as determined
by the purchaser of precious metals, if such item were
processed and refined by the purchaser of precious metals.
(c) Regulations.--The Commission may issue regulations
under section 553 of title 5, United States Code, to carry
out the purposes of this Act.
SEC. 3. ENFORCEMENT BY THE FEDERAL TRADE COMMISSION.
(a) Unfair and Deceptive Act or Practice.--A violation of
this Act or a regulation issued pursuant to this Act shall be
treated as an unfair or deceptive act or practice in
violation of a regulation under section 18(a)(1)(B) of the
Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B))
regarding unfair or deceptive acts or practices.
(b) Powers of Commission.--The Commission shall enforce
this Act in the same manner, by the same means, and with the
same jurisdiction, powers, and duties as though all
applicable terms and provisions of the Federal Trade
Commission Act (15 U.S.C. 41 et seq.) were incorporated into
and made a part of this Act. Any person who violates this Act
shall be subject to the penalties and entitled to the
privileges and immunities provided in that Act.
SEC. 4. EFFECTIVE DATE.
The provisions of this Act shall take effect 60 days after
the date of enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New
York (Mr. Weiner) and the gentleman from Kentucky (Mr. Whitfield) each
will control 20 minutes.
The Chair recognizes the gentleman from New York.
General Leave
Mr. WEINER. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days in which to revise and extend their remarks and
include extraneous material in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from New York?
There was no objection.
Mr. WEINER. Mr. Speaker, I yield myself such time as I may consume,
and I don't intend to use all of the time. I thank the indulgence of
the gentleman from Kentucky both in this debate and during
consideration of this bill in committee.
Mr. Speaker, during these difficult economic times, Americans are
looking for any way that they can to try to make ends meet. They are
taking on second jobs; they are looking through their cupboards, trying
to see if there is anything they can sell. Just about any opportunity
they can to make a few dollars people are looking for. That is why
there has been a great deal of attention paid recently to companies
that are advertising very heavily that if you give us your gold and
jewelry, we will give you cash for those products.
The problem is that when you put the gold and the jewelry in the
envelope and send it to some of these companies, they are finding that
consumers are not being treated very well. The Consumers Union and
their publication Consumer Reports did a good expose on this, turning
out the problems people face. Sometimes they are getting pennies on the
dollar for what comes back, but even more difficult are the cases where
people don't even agree to the transaction; or finding that since they
didn't act fast enough, their gold or jewelry had been melted down,
sold off for pennies on the dollar, and they were left with very little
recourse.
When Congress found out about this, a hearing was convened in
Congressman Bobby Rush's subcommittee in the Energy and Commerce
Committee. We heard from victims who had this happen to them. And we
also heard from industry groups. There was virtual consensus that more
needed to be done to protect consumers. You can have a debate, which
perhaps should go on in each household before you engage in one of
these transactions through the Internet or through the mail, whether or
not you should see a neighborhood pawn broker, a neighborhood jeweler,
someone who can give you some actual hands-on advice about these
things. But as with so many things with rare jewelry, it's like a lot
of other elements of products that consumers don't have a real
intrinsic sense of what they should be worth, so they are subject to be
taken advantage of.
The act we are taking up today, the GOLD Act, the Guarantee of a
Legitimate Deal Act of 2009, makes some changes in the law to give
consumers a little bit more weight on their side of the scale, no pun
intended. What it would mean is that under this new law a consumer
would have to accept or reject the offer before the transaction has
been considered complete. Right now there are many companies, including
Cash4Gold, the biggest one of them, that will give a finite number of
days after which they will simply melt down the gold and consider the
transaction completed.
It mandates that the purchasers of precious metals through the mail
insure the products and send them back in the same insurance level that
they were sent to them for. Let me explain why that's necessary.
According to the postal service, we have a large number of people
alleging that they would send their gold, say I don't want to do the
deal, and mysteriously when the gold was mailed back to them, it
disappeared in the mail. And, frankly, it seems more likely than not
that the people sending back those shipments never actually did it.
So what we are proposing here is that if someone insures it for $100
going, it gets insured for $100 when it gets sent back as part of the
transaction. And it would institute civil penalties for any company
that melts down someone's gold without the prior approval by the
consumer.
Now, as I said, you can have a debate, and I think that it seems from
a lot of the testimony that we took it's good to get a second or a
third opinion about the true value, as you might really have some rare
exotic piece of jewelry or something that has a high level of gold
content; and you may find that when you send it to one of these places,
as Consumer Reports found out when they did a study, they found out
that the people were only getting on average of between 11 and 29
percent of the value of the gold actually offered back to them.
So you should try to get some advice from an actual person you trust
in your community: a jeweler, a pawn broker, and the like.
But also what this finally says is if you are going to go ahead with
one of these transactions, if you are going to take a piece of jewelry
that you have, put it in one of these prepaid envelopes and mail it
off, you are going to continue to have control over the transaction
should this law pass. That's why the Consumers Union supports it, the
Jewelers Vigilance Council, which is the trade organization that
testified. And it's my understanding that even the biggest player in
the field that prompted this investigation, Cash4Gold, has said that
they support this legislation. And while they have had problems, I want
to commend them for doing so.
I reserve the balance of my time.
Mr. WHITFIELD. I yield myself as much time as I may consume.
I want to thank the gentleman from New York for bringing this matter
to the attention of the Congress, and specifically the Energy and
Commerce Committee. As he said, with the economic downturn and with the
dramatic increase in the price of gold, we see more and more people
mailing their gold possessions in an envelope to these companies that
are buying gold and then melting it down. It is a system that is ripe
with the opportunity to defraud a lot of people. And this legislation,
as the gentleman from New York stated, simply clarifies a number of
issues.
Number one, it makes it easier to determine whether or not a consumer
is
[[Page H8107]]
accepting the offer of the company that's buying the gold. It also
provides these additional protections on the insurance, because as the
gentleman from New York said, frequently the client, the consumer, did
not really want to sell; and yet it probably was melted down, and they
said, well, we mailed it back to you, but it was lost in the mail.
So this is important legislation, provides additional consumer
protections at a time when a lot of our consumers are particularly
vulnerable to being taken advantage of. I want to commend the gentleman
once again for his actions and urge the support of H.R. 4501.
I yield back the balance of my time.
Mr. WEINER. I yield myself such time as I may consume.
I want to thank Representative Whitfield for his kind words and for
his help in crafting this bill and making it better than what it was
first authored, Chairman Rush, who is the subcommittee chairman, and
his staff, Peter Ketcham-Colwill, Michelle Ash, and also Yuri Beckelman
of my staff and Bertine Moenaff of my staff, who helped do the
research, and of course Consumers Union and the Jewelers Vigilance
Council, who helped to provide testimony.
I urge my colleagues to vote ``yes,'' and I yield back the balance of
my time.
{time} 1130
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from New York (Mr. Weiner) that the House suspend the rules
and pass the bill, H.R. 4501, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. WEINER. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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