Rules on gold trade "aimed at consumer protection"

FPO director-general Somchai Sajjapong said that the office had set up a working group to study ways to oversee gold shops for consumer protection, with emphasis on saving retail gold buyers from fraud.

The working group is not aimed at preventing currency speculation.

"This working group was created after the Bank of Thailand wanted the FPO to find solutions over gold movement. We had one meeting," Somchai said.

Gold trade in the secondary market is overseen by supervision units, Thailand Futures Exchange (TFEX) and the Securities and Exchange Commission (SEC).

Somchai said that gold imports did not significantly affect exchange rates as high imports occurred only in some periods and the central bank was keeping an eye on them. He said the FPO had no intention of controlling gold imports.

"In the first meeting [of the working group], figures were shown. And irregular high figures happened only periodically. We know there was speculation in gold, but we have to see whether or not retail buyers were affected. This is our duty," Somchai said.

He said 23 investors were affected from online gold investment with combined losses of Bt300 million to Bt400 million.

About 7-8 investors have filed cases over credit default. The investors believe that gold companies’ marketing staff followed their firms’ policy of having their staff give orders to buy or sell gold for customers and that includes trade beyond the amount limit and call for more collateral when over-purchase is made without any notification in advance.

"Previously, affected investors lodged complaints with the Office of Consumer Protection. However, the office refused to accept them. They then went to the Department of Special Investigation, but the DSI told the investors not to do anything but wait for the situation to unfold. However, they are about to be proceed with the cases," Somchai said.