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Posted Tuesday, September 15, 2009

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Gold-buying company adds to its lawsuit over Internet complaints


Yonkers, NY ― A new investigative report from shines a spotlight on the business practices of Cash4Gold, which bills itself as the “World’s #1 Gold Buyer,” and on the company’s efforts to silence Internet criticism through litigation and financial incentives.

The report adds that the gold-buying company recently sued by appending the consumer-focused website to existing lawsuits against two former employees. The employees, Michele Liberis and Vielka Nephew, are accused of defamation and disclosing confidential information about the company in public statements and in Liberis’ post about Cash4Gold on a consumer-complaint site. That site,, was also added to the suits.

The legal action against the stems from its post last February titled “10 Confessions of a Cash4Gold Employee,” which was part of the site’s ongoing coverage of the company. The post was based on comments that Liberis, who formerly worked in C4G’s customer service department, had submitted anonymously to describing how Cash4Gold manages to pay customers a fraction of what their gold is worth.

In its advertising, the Ft. Lauderdale, Fla.-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, 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 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.”

Led by co-executive editors Ben Popken and Meg Marco, the investigation is the months-long culmination of reporting that includes interviews with former employees Liberis and Nephew, Cash4Gold customers, the Better Business Bureau, the local fire department and the US Postal Service.

“We follow-up on such challenges conscientiously,” says Marc Perton, Executive Editor for Online Media at Consumers Union, “and so we immediately set out to learn whether the company’s allegations had merit, both through our own research and through requests to Cash4Gold for more information.” The company has declined to cooperate, though, and just this week canceled a scheduled interview with Cash4Gold CEO Jeff Aronson.

The investigation provided support to’s decision to publish the “10 Confessions” post in the first place, and also turned up evidence that supports Liberis’ account of certain business practices and working conditions at the firm. But the also found that Cash4Gold may have made improvements in the time since Liberis worked there last year. For example, Liberis said the firm was shut down temporarily for “health and code violations,” a statement the company disputed. Fire department records show that the Cash4Gold location was indeed shut down after a number of violations last year, but that Cash4Gold has accumulated no new violations since moving to a different address earlier this year.

“We’re proud of the work that Ben and Meg have done, and we only regret that their report could not include a response from Cash4Gold CEO Jeff Aronson beyond his earlier public comments,” Perton said. “We also hope today’s post will help lay to rest the idea that blogs don't do investigative reporting.”

The Consumerist is a subsidiary of Consumers Union, the publisher of Consumer Reports, and, and the nation's leading not-for-profit consumer advocacy organization. Since its founding in 1936, Consumers Union has fought for a fair, just, and safe marketplace for all consumers and to empower consumers to protect themselves. To maintain independence and impartiality, CU accepts neither outside advertising nor free samples. It employs a staff of "mystery shoppers" who buy products in retail stores around the country, just as any other buyer would, and then ship them to the Consumers Union labs, where technical experts test some 3,000 products yearly.

To further advance its mission, CU employs a dedicated team of grassroots organizers, advocates and outreach specialists who work with the organization's more than 600,000 online activists to change legislation and the marketplace in favor of the consumer interest. Consumers Union is also the leading publisher of information to help consumers choose the right products, stay safe, and protect themselves against unfair business practices. In addition to The Consumerist and Consumer Reports, CU's publications include,, ShopSmart magazine, Consumer Reports on Health and Consumer Reports Money Adviser. CU's publications have received many major awards, including multiple National Magazine Awards, several Webby Awards and numerous awards for public-interest and health-care reporting.

Consumer Reports has no commercial relationship with any advertiser or sponsor appearing on this newspaper's web site.
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The legal action against the by Cash4Gold stems from its post last February titled “10 Confessions of a Cash4Gold Employee.”

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