EXPERT COMMENT

Why gold scammers thrive in Kenya

Ignorance costing dozens of people with appetite for quick cash to fall to the scams

In Summary

I• n some cases, metallic pieces are cut well and laced with brass to hoodwink uninformed buyers.

• Syndicates thrive by taking advantage of the fear many gold buyers harbour of not following the law.

Fake gold
Fake gold
Image: FILE

Hundreds of Kenyans are falling to gold scam syndicates following their ignorance about how the precious metals business is run. The scam is prevalent since a number of people seeking to buy the precious metal opt for underhand dealings to avert taxation or to get rich quick.

It is regrettable that most of those who have lost millions of shillings to the scammers did not follow the procedure set in the law. Gold has a ready market worldwide hence anyone purporting to sell to a buyer locally is just but out to defraud.

The con games involved the coating of metallic items such as iron and copper with brass, which most people pass off as gold. The problem we are having is that people want to do business without involving professionals.

With such ignorance, gold scammers easily present nuggets to unsuspecting buyers who are promised that the larger consignment is hidden elsewhere. In some cases, metallic pieces are cut well and laced with brass to hoodwink uninformed buyers.

It is happening in the sale of gemstones too because some are cooked in a laboratory and sold off as precious metals, yet they are not. We advise that no one should pay a dime before seeing the whole consignment and the same being tested in a government laboratory which has now acquired an x-ray spectrometer for testing gold.

Syndicates thrive by taking advantage of the fear many gold buyers harbour of not following the law and falling to the flamboyance displayed by conmen. Let Kenyans be advised against buying gold or gemstones that have not been tested.

What people are buying on the streets is brass, which once cooked, looks like gold. Some items are gold plated and unless you cut through, you will always think it is gold. Furthermore, Kenyans should be cautious about buying from unlicensed dealers. They are the majority in Kenya.

At the same time, no foreigner should purport to sell gold in Kenya since all countries have access to a gold market directly. These people always claim they are from Congo, South Sudan or West Africa, do not deal with them. You will be conned.

Those interested in precious gems and gold should buy from licenced dealers and most importantly, buy gold that has a certificate of the test. The best way is to go with the seller to a laboratory so you are not conned.

The chamber of mines is pushing for Kenya to establish a gold refinery which is accredited by London Bullion Market, London Metal Exchange and World Gold Council. The entities are now represented in South Africa, which can establish a branch in Kenya.  For gemstones, there should be established a Gem and Mineral Laboratory.

 
 
 
 
 
 

CP Mwangi is the Chairman of Kenya Chamber of Mines