House panel to probe gold coin deals
Now Congress is about to take a look at complaints that gold coins and commemoratives are dubious as investments and that the ads mislead consumers.
Rather than being gold bullion-like valuable assets, likely to rise in value as gold itself rises, a congressmen is asking whether the ads offer often overpriced trinkets of far less value than real gold.
"The frenzied marketplace has become rife with scam artists ready and willing to take advantage of consumers," said U.S. Rep. Rep. Anthony Weiner, D-N.Y., in announcing plans for a Sept. 23 hearing of a panel of the House Energy & Commerce Committee.
Weiner is offering legislation that would require sellers of gold coins and commemoratives to make clearer the likely investment value of the products. Scheduled to testify is Goldline International's executive VP Scott Carter.
Weiner earlier this year issued a report strongly questioning some of the practices of companies who advertise gold buying and selling on TV and held a hearing focusing on one of the buyers, Cash4Gold.
In that hearing, the committee heard reports of consumers who sent in rings and other jewelry and who were offered a fraction of the value of their items, and that when they asked for their items to be returned, they were often told the items were either "lost" or had already been melted down.
This week the focus turns to gold sellers and some of the ads' implicit suggestions that the gold coins are likely to appreciate like gold bullion. A recent article reported that Goldline offers gold coins at inflated prices, saying that one set of gold coins that Goldline was offering for $5,924 was being offered by another dealer for $3,295, and that a Goldline adviser suggested buying collectible coins because they are safe from confiscation by the government. The story said that Goldline's prices for bullion were more comparable to other sellers but the firm charges a fee for storage and sales.
Weiner has accused Goldline of playing on phony fears that gold is a "safe investment alternative." He accuses Goldline of "grossly" overcharging for its coins, pricing coins as much as 90% above a coin's melt value. He has also accused the company of falsely claiming gold coins are a "good investment;" and falsely presenting its sales people as "financial advisers."
"It's shameful that companies like Goldline are able to rip off consumers, use misleading and possibly illegal sales tactics, and deliberately manipulate public fears to sell gold coins at inflated prices," he said.
Eric Hoffman, a spokesman for Goldline, denied the charges, suggesting instead that Goldline is being targeted by a Democratic congressman because of its ads on conservative TV and radio.
Goldline International has been in the collectibles business for more than 50 years and enjoys an A-plus rating from Better Business Bureau," he said. "It would be impossible to survive for 50 years without providing quality products at competitive prices."
"What this hearing is about is Congressman Wiener's attack on Goldline because it advertises on conservative radio and TV shows," he said.