Households in Huddersfield could be losing more than £130,000 a year to unscrupulous gold buyers, according to a Kirklees dealer who has launched a set of ‘golden rules’ to help people sell safely.

Cash4Gold Direct, which has been buying precious metals from its Cleckheaton shop for 15 years, estimates that rogue buyers operating outside the reputable trade – doorstep callers, car boot dealers, pop-up ‘gold-buying events’ and unvetted private buyers found online – cost UK consumers around £57 million every year.

Applied to Huddersfield’s population of around 160,000, that works out at more than £130,000 a year lost in the town alone, and close to £360,000 across Kirklees as a whole.

The warning comes at a time when more people than ever have a reason to sell. Gold hit an all-time record of close to £4,000 an ounce in March and, though it has eased back since, remains at historically exceptional levels.

Reputable buyers are currently paying around £28 to £32 a gram for 9ct gold – enough to make a broken chain worth close to £100, and a forgotten tin of oddments worth several hundred pounds.

Director John Sumner said the people with the most to lose were often those least likely to know what their gold was worth.

“It’s usually someone selling inherited jewellery after a bereavement, or a drawer of things that haven’t been touched for decades,” he said. “At today’s prices, the difference between a fair offer and a bad one on a single jewellery box can run to hundreds of pounds.”

Huddersfield has around 27,000 residents aged 65 and over and, according to National Trading Standards, 85 per cent of doorstep scam victims fall into that age group.

Mr Sumner said the gold trade was in far better shape than it was 15 years ago, but that there was still sharp practice at the edges – and, remarkably, no licence is needed to set up as a gold buyer in Britain.

“You need a licence to deal in scrap metal in this country, but not to buy someone’s gold,” he said. “We’d welcome mandatory registration for every gold buyer – reputable businesses would have nothing to fear from it. Until that happens, the best protection people have is knowing which questions to ask.”

Five questions every gold buyer should be happy to answer

1. How will you test my gold, and can I watch? Reputable buyers use XRF (X-ray fluorescence) testing, which reads the exact gold content in seconds without damaging the item, and do it in front of you. An unmarked piece can be tested just as precisely – don’t let anyone talk it down because it has no hallmark.
2. What will you pay me per gram today, and how does that compare with the live price? Gold is priced on a published market you can check on your phone in ten seconds. A fair buyer will tell you the rate for each carat and where to verify it. Be wary of headline rates that look too close to the raw market price – some are only paid on selected items.
3. Will you weigh each carat separately? Mixing 9ct, 18ct and 22ct on the scale means everything gets paid at the lowest rate. Every item should be tested and weighed separately, on scales you can see.
4. Who am I actually dealing with? Look for a registered limited company, premises you can walk into, and testing done in full view. Voluntary safeguards such as HMRC anti-money laundering registration, which Cash4Gold Direct holds, are a good sign.
5. What happens if I say no? Your items should come back to you free of charge, insured, with no fees and no obligation. If you’re posting your gold, the pack should be tamper-proof, tracked and insured as standard.

Mr Sumner added: “None of this is about frightening people out of selling. Prices are exceptional, and for most families that drawer of broken chains and single earrings is worth genuinely useful money. Ask the five questions, and sell to whoever answers them best.”