Infographic by The Big Picture
Goldline International is under investigation by the Santa Monica City Attorney’s office, jointly with the Los Angeles County District Attorney’s office, as well as being the subject of a separate investigation by Congress into the possible criminal practices. The firm has been the subject of an ABC Nightline News Exposé, as well as an investigation by NY Congressman Weiner).
Jess Bachman, who did several of the fantastic illustrations for Bailout Nation, turns his graphic expertise to the Glenn Beck/Goldline endorsement scheme.
Congress Formally Opens Investigation into Goldline & Other Shady Gold Dealers
New York, NY – Rep. Anthony Weiner (D – Queens & Brooklyn) and House Commerce Subcommittee Chairman Bobby Rush (D – Chicago) formally announced a hearing of the Subcommittee on Commerce, Trade, and Consumer Protection to investigate the business practices of Goldline International, a precious metals dealer that uses aggressive sales tactics and conservative spokespeople such as Fox News’ Glenn Beck to sell overpriced gold coins. Weiner and Rush sent a letter to Goldline requesting information in preparation for the hearing.
The announcement follows an exposé on ABC News which detailed Goldline’s business model. Additionally, the Santa Monica City Attorney’s office launched a joint investigation with the Los Angeles County District Attorney’s office into the possible criminal practices of Goldline International.
To Watch the ABC News Exposé CLICK HERE
In May, Rep. Weiner’s office released a report outlining problems with Goldline
Among the Key Findings of Rep. Weiner’s Report: (Full Report CLICK HERE)
• Goldline Grossly Overcharges For Their Coins
The average Goldline markup was 90% above the melt value of the coin. The largest markup on any coin was 208% above the melt value. Furthermore, the average Goldline markup is 47% higher than better-priced competitors, with some of the company’s markups going as high as 102% compared to its competitors on one of the coins they offered.
• Goldline Falsely Claims To Offer “Good” Investments
By selling gold at twice the melt value, the price of gold would need to double for consumers to break even on their “investment.”
• Goldline Salespeople Misrepresent Their Ability To Give “Investment Advice”
Sales people imply that they are “investment advisors” or “financial advisers” by offering investment advice, which insinuates that they have some sort of fiduciary responsibility to get you the most return on your investment.
However, since they are not licensed investment advisors, they have no such responsibility. In 2006, the Missouri Secretary of States’ Office, Securities Division filed formal consent order against Goldline for exactly this reason and recovered over $200k for an elderly consumer that was ripped off.
• Goldline Plays off Public Fears of Government Takeover and Has Formed an Unholy Alliance with Conservative Pundits to Drive a False Narrative
Goldline employs several conservative pundits to act as shills for its’ precious metal business, including Glenn Beck, Mike Huckabee, Laura Ingraham, and Fred Thompson. By drumming up public fears during financially uncertain times, conservative pundits are able to drive a false narrative. Glenn Beck for example has dedicated entire segments of his program to explaining why the U.S. money supply is destined for hyperinflation with Barack Obama as president. He will often promote the purchase of gold as the only safe investment alternative for consumers who want to safeguard their livelihoods. When the show cuts to commercial break, viewers are treated to an advertisement from Goldline.
“Goldline rips off consumers, uses misleading and possibly illegal sales tactics, and deliberately manipulates public fears of an impending government takeover – this is a trifecta of terrible business practices,” Weiner said. “It’s disgraceful that this company would capitalize on financially unstable times to prey upon people’s nest eggs.”
Rep. Weiner, who sits on the House Subcommittee on Commerce, Trade and Consumer Protection, wrote letters to the SEC and FTC requesting that they investigate Goldline and is proposing legislation that would force Goldline and companies like it to fully disclose their dishonest business practices. Under Rep. Weiner’s plan, Goldline would be required to show consumers its full business model including its astronomical markups and deceitful promises of profitability. No date has been announced but it is expected that the hearings will be held later this summer.