Your Money: Sellers, beware of precious-metal buyers

The killer drop in the price of gold last month prompted plenty of readers to ask about buying and selling the yellow metal - not only their investments, but also the actual gold bullion.

Over the last 12 years, the prices of gold, silver, and platinum have soared and then corrected, and, as a result, fraudulent buyers and sellers have popped up as well - urging us to clean out drawers of old or unused gold and silver for sale at top-dollar prices.

But precious-metal prices are also extremely volatile. The price of gold in 2011 briefly touched $1,900 per ounce, and last week it closed at just over $1,470 an ounce. Gold's 9.3 percent plunge on April 15 was the biggest one-day drop since March 1980.

Many metals dealers come from out of state and set up shop in hotels for a weekend (you may have seen their ads in newspapers and elsewhere). But before you decide to sell, AARP's Mary Bach, chair of the lobbying group's consumer issues task force, warns that you should become familiar with some basic guidelines defined by Pennsylvania laws and regulations.

Start by having your items examined, appraised, and weighed by a local jeweler to establish a baseline weight and value, says Dean Ely, executive director of the Pennsylvania Association of Weights and Measures (www.pawam.org). Only after that should you approach a dealer.

When you visit a gold dealer's premises, ask whether it is licensed with the county sheriff. Pennsylvania law requires any person dealing in previously owned metals to be licensed with the sheriff, and if the staff says no or they don't know, "walk away," Bach says.

Similarly, if they don't post current prices for gold, silver, or platinum, go elsewhere.

If you do sell to a dealer, make sure his or her scales are visible, so you can watch while your items are weighed, and make sure the scale bears a current seal of approval (again, this is only if they are Pennsylvania metal dealers). Most people aren't familiar with the metric or troy system of weights for precious metals, so dealers must post a conversion chart so consumers understand what they are being offered.

If you've found a buyer who meets all these criteria, and you finally decide to sell, make sure you receive a complete and descriptive receipt. Pennsylvania law requires the dealer to give a receipt with the name, age, address of the seller; a description of the item, including weight; and a receipt copy that must be submitted to the county district attorney within 24 hours of the transaction.

"It is never advisable" for you to send your precious metals off by mail to an unknown dealer, Ely added.

If you do have a problem or need to lodge a complaint about the selling of your metals, contact your state's attorney general's office or, in Pennsylvania, the Weights and Measures hotline (1-877-837-8007).

Pennsylvania Attorney General Kathleen Kane spoke last week at the Federal Reserve Bank of Philadelphia about investment and financial scams targeting seniors. They included:

Payday lenders angling for Social Security checks.

Home improvement frauds.

Medicare fraud, whereby health-care and home aides overbill a patient or the system.

Phony charities claiming to be enlisting help for relatives and friends.

"Never give money over the phone," Kane said, and never give out your Social Security number or other personal information.