Gold dealers in Birmingham have welcomed moves to introduce a code of conduct designed to curb rogue traders – after a Birmingham Post investigation found many failed to ask for identification.
From April, traders will be able to sign up to a voluntary code of practice that will require the collection of proof of identity and proof of ownership from those wishing to sell their gold.
At present there are no legal or industry requirements that demand this information, making it easy for thieves to sell on stolen gold.
A Birmingham Post investigation revealed a lack of security checks among Birmingham jewellers.
Five stores were visited, none of which asked for any identification before agreeing a price to be paid in cash on the spot for gold jewellery worth £1,175.
Michael Allchin, chief executive and assay master of The Birmingham Assay Office, said: “I suspect you’ll find that different people have very different levels of scrutiny.”
The Assay Office recently introduced a one-day course on buying scrap gold, which teaches best practice methods as well as identifying hallmarks and testing the gold’s quality.
“Part of the course is for them to understand what the gold is,” said Mr Allchin. “The other part is to protect their own reputation and integrity.”
He said the Assay Office supported the code of conduct proposals “immediately”.
“At the end of the day the whole jewellery trade works on trust,” he said. “If the jewellery trade gets damaged, we all get damaged. We’re all in this together.”
The British Jewellers’ Association has been working on the proposals – known as the Gold Standard – with other trade organisations and the Surrey Police for over four months.
Simon Rainer, chief executive of the British Jewellers’ Association (BJA) based in Birmingham, said: “It will provide a uniformity on how gold is traded. Sellers will have to provide identification, and sign a disclaimer that they have authorisation to sell the product in the first place.”
Traders will also record transactions through CCTV and hold records for up to 30 days.
The initiative was sparked by frequent calls from police to the BJA attempting to trace stolen gold. With prices running at record highs, gold has never been more attractive to thieves, and their job is made easier by dealers who are willing to buy gold without any proof of ownership.
Asian gold is believed to be a particular target because of its high quality – 22 or 24 carat.
Crimestoppers in the West Midlands launched an Asian Gold campaign in Birmingham last year, targeting communities most at risk.
The charity raises awareness of the issue around key festivals such as Diwali, when Asian families are more likely to take jewellery out of safety deposit boxes to wear to parties.
There are currently “no recommendations or standards” for people buying gold, said Mr Rainer. Any security checks are a matter of company policy rather than a legal or professional requirement.
Nigel Blackburn is chairman of Lois Jewellery, one of the biggest gold buyers in the Jewellery Quarter.
In 2010, his business had a £12 million turnover – last year that rose to £250 million. His staff buy about £5 million worth of gold every week, much of which is melted into gold bars on site.
He said: “For us, anything that everybody has to abide by makes our job that much easier. We don’t knowingly buy stolen jewellery.”
His store is rigged with 30 CCTV cameras filming every transaction, which is done in front of the customers.
“We film everything that comes in,” he said. “We record the weight, we take identification. We also work very closely with the police.”
Mr Blackburn added: “There are unscrupulous dealers who will buy anything from anybody.”
He said that unless stolen gold is found within 48 hours, the chances are it will already be melted down. Other jewellery insiders said it would take far less time for the gold to disappear.
Gold sales aren’t covered in the Scrap Metal Dealers Act, which requires dealers to keep records of material received.
Scrap metal dealers could be placed under greater pressure with new legislation going through Parliament putting an end to cash payments, for example – but precious metals are not currently included.
“We want to take matters into our own hands,” said Michael Hoare, chief executive of the National Association of Goldsmiths.
“We think it’s better to draw up our own code of practice that have legislation forced on us at a later point.”
A spokesman for West Midlands Police said: “We have worked hard over the past year to tackle the issue of gold theft.
"In addition to promoting good home and personal security, and targeting suspected offenders, we have worked with second hand goods dealers to take the market out of stolen items through initiatives such as our Trusted Trader scheme in Sandwell.
“We are looking to extend this scheme in the near future and welcome the industry’s support.”