Recent accusations of a Goldline scam have shed some disturbing light on the gold buying business, and the FTC is warning consumers to be wary when investing in precious metals. Accused of deceitful and predatory sales practices, the company recently faced a 19-count criminal fraud complaint involving a supposed scheme to overcharge consumers for collectible coins. Before you participate in a similar investment opportunity, learn what the FTC is saying about these companies.
The case against Gold Line
In 2011, the Santa Monica City Attorney's office accused GoldLine.com of operating a bait-and-switch scam in which the company allegedly convinced customers to buy collectible coins instead of bullion coins. According to the complaint, this allowed the company to mark-up the sales price, which devalued the investment. Ultimately, the gold buying business was charged with several misdemeanors, including theft by conspiracy, false advertising and false pretenses.
In the end, the company agreed to settle the lawsuit in return for refunding approximately $4.5 million to past customers. The settlement also set new requirements for the business going forward that force the company to stop providing false information to investors.
Glenn Beck involved in the Goldline scam?
According to various complaints, Gold Line worked with conservative television personality, Glenn Beck to encourage consumer demand by making false statements regarding the future of the economy. Many have accused Beck and other conservative personalities, such as Porter Stansberry, of using fear-based language to scare consumers and promote the gold buying business.
The FTC offers recommendations
According to the Federal Trade Commission, precious metals provide investors with a legitimate way to diversify their portfolios; however, they shouldn't be seen as a way to safeguard against potential economic turmoil. Unfortunately, according to the agency, many gold buying companies attempt to scare consumers by making false claims about the future value of the American dollar. The FTC also warns that, in an attempt to attract more buyer attention, some companies falsely claim that the federal government intends to confiscate gold.
Recently, the FTC issued tips on how to buy gold that outline safe practices and warn against potential rip-offs similar to the Goldline scam. This information also explains the difference between buying collectible coins and bullion coins, an important aspect associated with many investment rip-offs. Before you invest in precious metals, take a few moments to read over this information, and familiarize yourself with a particular company's reputation before accepting any one particular investment offer.