Beware of Fraudulent Gold Coin Dealers
Some scam gold coin dealers have targeted people who may be searching for financial stability by investing in gold. Don’t let this happen to you! Follow these tips:
In some cases, gold coin dealers work to build a potential victim’s trust and then get them to send in payment for a supposed delivery of coins, but then fail to deliver the product. This type of non-delivery scam is theft. These fraudsters may rely upon aggressive marketing tactics, flashy websites, and/or a sense of urgency to get people to send them thousands of dollars for coins. In some cases, the fraudster may claim to have access to “special deals” or “once in a lifetime investment opportunities” which they use to convince their victims to act immediately. In other cases, the scammer may try to create a heightened sense of fear about the economy or the stock market. Scam coin dealers that target senior citizens may even try to invoke fear about the potential of another Depression or market crash. Once the fraudulent operator gains the victim’s trust, they pressure them into sending payment, but once they obtain the money, they cut off contact with the person and refuse to deliver the coins or provide a refund. Due to the criminal nature of this type of scam, citizens with information or who believe they may be victims, should report it directly to the criminal authorities, including their local police, sheriff, county attorney, and federally to the Federal Bureau of Investigation as follows:
Federal Bureau of Investigation
1501 Freeway Boulevard
Brooklyn Center, MN 55430
Another scam involves the fraudster delivering coins whose value is significantly less than what the dealer represented. Fraudulent dealers may convince buyers to either buy such coins at rates with extremely high mark-ups, or convince them to trade in their own coins for what they are falsely led to believe are coins of a similar value. Since victims of this scam can potentially lose thousands of dollars, it is important to do your research before engaging with any coin dealer. Research the type of coins in question, the reputation of the company, as well as the grading company. Perpetrators of the scam sometimes try to gain credibility by claiming that the coins have been professionally graded, when in fact the supposed “grading company” is not independent from the dealer itself. Citizens interested in buying coins should closely scrutinize the entities involved in the transaction, examine the coins in person if possible, and get a second opinion about the grade and value of the coins in question. Also, consider consulting a reputable financial advisor that you trust. Do not take the dealer’s word for it, and do not rely upon representations from any party that the dealer may steer you to.
“Wilma” is a retired widow in her late 70s on a fixed income with a small coin collection that she and her late husband obtained several decades ago. Wilma received a cold call from a coin dealer claiming he would like to purchase her collection of Swiss Francs for $10,500. Since Wilma was looking to liquidate her collection, she agreed to send the coins in exchange for $10,500. The following day, the dealer contacted her to indicate that the price of gold had dropped, and that he could no longer pay her $10,500 for the coins, but would instead pay her $8,500. Wilma did not agree and although she kept calling the dealer, he continued to delay returning her coins or processing the payment. A week later, the dealer sent her a different collection of silver dollars, claiming they were of similar value. When Wilma had the coins appraised by an independent company, however, it indicated the coins were only worth $1,100. Wilma was unable to get the dealer to return her telephone calls or to return her coins or money.
Coin Dealers are Not Licensed.
Coin dealers are not required to be licensed. People should proceed with caution before agreeing to do business with a given dealer. Some individuals operating within the industry have extensive criminal histories. Customers should do their homework on the owners, operators, and sales staff at a given dealer. Don’t be rushed.
Coin Dealers and Investment Advice.
Some coin dealers may try to convince potential buyers to cash in their stocks, bonds, or other investments in order to purchase gold, precious metals, or coins. Fraudulent coins dealers use a combination of fear, intimidation, and technical jargon to get people to make an “investment” in gold or collectable coins. Investment brokers or individuals who provide investment advice may be required to be licensed by the Securities Exchange Commission and the Minnesota Department of Commerce. If a given dealer makes representations about the investment value of their product, or claims to provide other investment advice, contact the SEC and the Department of Commerce to see if they are or were registered. The SEC and the Commerce Department may be reached as follows:
Securities and Exchange Commission Office of Consumer Affairs 450 5th Street NW Washington, DC 20549 202-942-7040
Minnesota Department of Commerce
Market Assurance Division
85 East Seventh Place, Suite 500
Saint Paul, MN 55101
People who have additional questions or concerns about a given gold or collectable coin dealer, may contact the Federal Trade Commission and the U.S. Postal Inspection Service as follows:
Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue NW
Washington, D.C. 20580
Toll free: 1-877-382-4357
United States Postal Inspector
PO Box 64558
St. Paul, MN 55164
(651) 855-5840 or (877) 876-2455 United States Postal Inspection Service
222 South Riverside Plaza, Suite 1250
Chicago, IL 60606-6100
For more information, or to file a consumer complaint, people may contact the Minnesota Attorney General’s Office as follows:
Minnesota Attorney General's Office
1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101
TTY: (651) 297-7206
Door-to-Door Sales and Telemarketers that Target Seniors
Senior citizens make up one-twelfth of the population in Minnesota, but are often disproportionately targeted for fraud over the telephone and at their doorstep. The Attorney General's Office gives Senior citizens the following advice when it comes to unsolicited door-to-door callers and telemarketers.
Seniors' Guide to Fighting Fraud
This guide will inform you about the common scams aimed at seniors and the steps consumers can take to thwart the swindlers.
How to Dispute Bogus Credit, Debit, and ATM Card Charges
Many consumers use "plastic" - that is, credit, debit, or ATM cards - to pay for goods and services instead of cash or checks. With identity theft on the rise, citizens often wonder what their rights are if their credit, debit, or ATM card is lost or stolen.