A class action lawsuit (PDF) was filed against Cash4Gold in California federal court last Friday, accusing the company of a "massive scheme to defraud tens of thousands of consumers throughout the nation," and racketeering.

The lawsuit says there are two specific promises that Cash4Gold makes and breaks: 1) that there is a 12-day return policy and 2) items sent in will be handled with the highest care. Cash4Gold breaks the first, claims the lawsuit, when checks are received by customers either after the return period is over or close to it, or when the company melts the jewelry before the expiration of the return period - allegedly a frequent occurrence.

Cash4Gold breaks the second when it "repeatedly 'loses' the items sent," frequently blaming the mail service for "an absurdly high number of 'lost' items," according to the suit.

The lawsuit says, "These promises are lies. In a massive scheme to defraud tens of thousands of consumers throughout the nation, Cash4gold breaks both of its well-publicized promises with abandon, all the while committing a series of other frauds and misconduct, including attempts to silence former employees who dare to expose this fraud."

Furthermore, Cash4Gold employs "a deliberately frustrating so-called "customer service" system which results in most individuals eventually giving up attempting to receive compensation for their "lost" or greatly under appraised jewelry."

The various techniques Cash4Gold customer service reps use to delay and discourage consumers from getting their money's worth or their gold back illustrate how Cash4gold's "institutional culture is corrupt to its very core, designed at all levels to commit fraud," says the lawsuit, which seeks treble damages.

Reached for comment, Cash4Gold responded, "Cash4Gold has not been served with a complaint and therefore has no comment at this time."

Read the entire lawsuit here. (PDF)

More information about the suit can be found in the press release on the plaintiff's lawyer's website.

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