The Federal Trade Commission has charged some precious metal dealers for conning consumers into buying precious metals on credit without disclosing all of the costs and risks involved with the transaction.
The promoters of this bogus investment scheme have agreed to pay $24 million in a settlement to resolve FTC charges.
The individuals involved are now permanently banned from marketing any type of investment opportunities and one is banned from marketing precious metals investments.
Precious Metals Dealers Agree to $24 Million Settlement
According to the Federal Trade Commission, the defendants must pay more than $24.3 million in addition to the proceeds from the sale of a Florida condo and other personal property.
Harry Tanner, Sam J. Goldman, and American Precious Metals are now prohibited from misrepresenting and failing to disclose the material terms about goods and services they offer to consumers.
They are also not permitted to benefit from any customers’ personal information and must properly dispose of this type of information property any time in the future.
According to the FTC, the defendants had promised consumers that they would be earning large profits as quickly as possible on their precious metals investments but the defendants failed to communicate or disclose the high fees and risks involved of making such investments.
As they entered in the agreement, consumers were not told that their investments were actually financed and that they were receiving loans of up to 80 percent of the purchase price of the precious metals.
They were also unaware that their investments would be subject to equity calls that could mean paying more money to prevent liquidation of their initial investments.
Tips for Avoiding Precious Metals and Investment Scams
If you want to avoid these types of investment scams, follow these tips:
- Do some independent research about the dealer before you invest
- Don’t give in to a pushy sales person or let someone talk you into making an investment that doesn’t seem right to you
- Avoid any offers or proposals that promise extremely high returns with little risk – if it sounds too good to be true, it probably is.