Feds Sue Gold, Silver Investment Company That Allegedly Bilked Millions From Retirees

Buying gold and silver is in many ways no different than anything else: You pay your money and expect to get what you paid for within a reasonable amount of time. Unlike most other products, when that gold and silver never arrives, you could be out thousands of dollars.

The Federal Trade Commission announced Friday that it has filed a lawsuit against Discount Metal Brokers — also operating as Discount Gold Brokers, and NorthAmericanDiscountGold.com — accusing the company of bilking millions of dollars from retired consumers through a series of deceptive advertisements.

According to the complaint [PDF], Discount Metal Brokers, which stopped operating in 2014, ran national media ads to entice consumers into using their retirement savings to order “invest” in precious metals, ranging from $1,000 to $3,000 and then never shipped the products.

The ads, which appeared on CNN, Fox News, Fox Business Network, and various radio programs, marketed gold and silver sales “at discounted prices” with “zero commissions, fees, or expenses,” and at “zero percent above dealer cost.”

Additionally, the company touted gold and silver as a safe retirement investment on their website, using purported articles such as “Gold as a Hedge against a Declining U.S. Dollar and Rising Inflation.”

The FTC’s complaint alleges that once customers were interested in the investments, the company required up-front payments via check or wire transfer.

According to the FTC, the defendants advised customers to “allow a minimum of 2-4 weeks” for delivery. If anyone called to ask about delivery dates, they were told their orders would “ship soon,” without providing a definite shipment date or reason for the delay.

In some cases, customers say they were given a variety of reasons for the delay, including that their gold and silver has been part of a “shipping mix-up,” or that there was a “backlog” of orders.

After paying thousands of dollars, hundreds of consumers complained that they never received their orders, the FTC states, noting that despite attempts by customers to receive a refund, Discount Metal Brokers never provided one or sent the ordered silver or gold.

The FTC accuses the company of violating the FTC Act and the FTC’s Mail, Internet or Telephone Order Merchandise Rule, which requires sellers soliciting orders via mail, internet, or phone to have a reasonable basis to expect that they can ship merchandise within any advertised time frame, or within 30 days if no specific time frame is promised.With the lawsuit, the FTC seeks to recover funds from the company and return it to consumers.

by Ashlee Kieler via Consumerist