Surprise inspection led to fines for some Arizona gold buying businesses

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By Andrew Michalscheck By Andrew Michalscheck

PHOENIX -- A surprise inspection at dozens of Arizona gold and jewelry buying businesses found about a third were not following state laws.

The Department of Weights and Measures audited a total of 50 scales at the 40 different businesses during the past two months. Of those scales, 17 were cited for a violation.

The violations ranged from non-licensed and inaccurate scales to businesses using scales that were not legal for trade.

In all, eleven different businesses were cited for non-compliant violations and were fined $8,400 in civil penalties assessed against them. 

In many cases, investigators found scales which under-registered the actual weight. The department also said there were other instances where businesses used scales that didn't have a tamper-proof seal, allowing them to tamper with the scale.

"It is our experience that many of these gold buying locations operate with illegal measuring devices, and then close up shop nearly as quickly as they open" said Kevin Tyne, Director of the Department of Weights and Measures. "Clearly, we need to stay on top of this as these most recent inspections lead us to conclude that additional evaluation is necessary to ensure fair business practices and proper measuring devices."

This is the third round of inspections specifically targeting the gold buying industry, given its past abysmal compliance rates during the past three years.

The Department of Weights and Measures said 39 businesses out of 44 were cited for multiple infractions and $45,000 in civil penalties levied in 2010. In 2011, 18 of 40 gold buying businesses were also cited for similar violations.

Department officials recommend would-be sellers of gold to do their homework, and look into whether a business has complaints against it.

As a rule, know the weight and karat of gold ahead of time as it will clearly determine the fair market value before you attempt to sell your gold.