Cash for gold shops facing regulation

Cash for gold shops could be forced to keep records on the identity of people who sell to them and the source of jewellery traded under controls being considered for the industry.

There has been an explosion in the number of these shops in the last three years and 124 operate around the country, driven by the rising value of gold.

Alan Shatter, the justice minister, said it is inconsistent that they are not subject to the same strict laws as pawnbrokers in preventing the sale of stolen items.

“Pawnbrokers have to keep a record of who provides them with goods and of their address,” he said.

“If a pawnbroker receives such goods knowing that they are derived from an offence, that can give rise to criminal prosecution.”

Mr Shatter said there are difficulties in drafting laws in the area because they could place unnecessary burdens on antique or second-hand jewellery shops that have operated successfully for years.

He has asked the Oireachtas Committee on Justice to examine a report published by his department yesterday on the cash for gold trade.

It found there is no “major crime” problem involved with the shops but that laws to deal with theft and fraud are adequate.

Burglaries increased 7.9% in 2011 compared to 2010, but compared to 2009, they have risen from 26,911 to 27,439, or 2%, the report found.

In a submission, the Garda Commissioner, Martin Callinan, said there was no evidence to link burglaries to the cash for gold trade.

“It is difficult to subscribe to the proposition that the increase in cash for gold trading has had an adverse effect on the incidences of burglary offences,” he said, adding, “that is not to say that outlets which purchase gold do not buy stolen goods”.

His report said there has been an overall drop in the number of burglaries involving stolen gold since 2005.

But it said money-laundering laws could be extended to include cash for gold outlets and shops should be required to report suspicious trading.

“Gold items can be melted down very quickly, rendering such gold items unidentifiable and resulting in major difficulties for gardaí in their efforts to identify and recover such items,” the report states.

Mr Shatter said there is public concern about the shops. “Some people are of the belief that these outlets are used by individuals engaged in burglaries and theft generally,” he said.

“But the Garda Siochána report back that they are not aware of the involvement of criminal elements in the ownership of cash for gold outlets.”

The report concludes “there are grounds for considering some controls”.

These could relate to “identification of the seller, information on the source of the valuable and its identification”. They could also include “a requirement to record the transaction and provide access to items and records to the Garda”.

The committee will discuss the report before making recommendations to the Government.