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OFT Says Postal Gold Firms May Have Breached Rules

Sept. 22 (Bloomberg) -- The U.K.’s Office of Fair Trading said it is consulting with some companies that buy gold from customers through the mail because they may have breached consumer-protection legislation.

The authority asked some gold-buying companies to provide details on business practices and explain claims made in advertising. The OFT said it wanted to consider whether the companies complied with consumer-protection laws, examining issues such as whether customers’ rights to reject an offer for their gold and receive the metal back were honored in all cases.

“The OFT is consulting with the companies to bring about a cessation of the breaches it believes has occurred and seek undertakings,” the authority said today in a statement on its website. “In the absence of suitable undertakings, the OFT may take appropriate court action.”

Pritie Billimoria, a London-based spokeswoman, was unable to identify any of the companies or specify what laws may have been breached. The OFT, tasked with ensuring markets work well for consumers, said it aims to provide an update before the end of the year.

Gold for immediate delivery has advanced 18 percent this year. The metal reached a record $1,296.30 an ounce earlier today and traded at $1,287.72 at 5:10 p.m. in London. Priced in British pounds, bullion has gained 21 percent this year, data compiled by Bloomberg show.

To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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