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Last year, pawnshops lost a total of $56,000 to scammers capitalising on rising gold prices.
Gold prices have climbed close to 50 per cent since last year, from US$630 (S$887) an ounce in early 2007 to US$936.92 an ounce this month.
Police said that there had been 52 cases of fake gold being pawned last year. The pawnshops, located in different parts of Singapore, reported losses ranging from $40 to over $5,300 each.
The Sunday Times learnt from pawnbrokers that a foreign syndicate using Bangladeshi runners was behind the scams.
The syndicate was sophisticated. The fake jewellery it hawked as pure gold had thick gold plating and even imitation hallmarks which fooled many pawnshops.
The hallmark is a guarantee that the gold has been checked and certified for its precious metal content by a qualified office.
Said one pawnbroker in Toa Payoh: 'This syndicate is very professional. The thick gold plating ensures that, when the necklaces are scratched for authenticity, the metal beneath is not revealed.'
Police said one pawnshop paid $4,000 to a man for a pawned gold chain last October after running some tests on it. But the chain turned out to be gold-plated.
Said a pawnbroker in the Serangoon area: 'Foreigners use fake IDs or work permits. After taking the money, they leave the country. How to catch?'
Still, an experienced pawnbroker can beat the scammers.
A Bangladeshi man had tried to pawn a gold-plated necklace at a pawnshop in Bedok last year.
But the staff at Soon Soon Pawnshop, which is owned by the ValuMax group, immediately sensed that the 20g gold necklace was a fake just by feeling its heft in their hands, said ValueMax operations manager Yeah Lee Ching.
They called the police and then pretended to process the transaction so that the man would not leave. He was arrested and jailed eight months for cheating.
Not all pawnshops were that sharp. Min Lian Pawnshop in Joo Chiat was cheated three times last year by the scammers.
The pawnshop realised that it had been cheated only when it sold a necklace, bracelet and bangle set six months after it had accepted the items.
The buyer cut up the jewellery items and discovered that they were gold-plated.
The pawnshop's director, Mr K.L. Lee said: 'We were shocked. We had tested the pieces and they seemed real. Even our experts could not tell the difference.'
Mr Lee did not elaborate on what tests were used.
Mr Lam Kwi Peng, assistant treasurer of the Singapore Pawnbrokers' Association, said that technology has enabled fake gold items to become such good copies that even experienced pawnbrokers can be hoodwinked.
'Nowadays, physical inspection alone is not good enough,' he said.
More scammers tend to surface when gold prices are on an uptrend, as was the case since last year.
Also, more people may unwittingly be pawning fake gold that they thought was real.
Said Mr Paul Ho, director of Heng Seng Pawnshop in Toa Payoh: 'Sometimes, people don't know their jewellery isn't gold. It could have been a gift or been mixed up with real gold jewellery.'
If a pawnshop decides this is the case, it will just reject the jewellery instead of calling the police.
For pawnbrokers like Mr P.K. Lam of Wing Teck Pawnshop in Serangoon North, vigilance is the only way to beat the scams. He tells his staff to run more checks now.
He said: 'Normally, we'd just scratch the gold to check if it's real. Now, we will also conduct acid tests. There is no harm in being extra careful.'
SingPost said that its six SpeedCash pawnshops had not been hit by the scams.
A spokesman said: 'We rarely see these kinds of cases as we have a stringent process in place to mitigate the risk of people pledging fake gold items.'
