Gold Dealer Scam Warning - 9 May 2011
"This shouldn't be happening against senior citizens, but it is. It's happening everywhere," Voss told the Star Tribune newspaper last week.
Voss added that the problem of coin fraud is only just beginning, as the high price of gold prompts new coin companies to enter the market.
"When [gold coin buyers] start realizing that what they bought, they shouldn't have bought, and that they bought it way too high...I think there's going to be a major, major problem," said Voss.
Ben Wogsland, spokesman for the Minnesota state attorney general's office, describes the Gold Coin industry as "somewhat like the Wild West", since it is not regulated in the US in the same way as the financial services industry.
US Congressman Anthony Weiner (D-NY) last year sponsored the Precious Coins and Bullion Disclosure Act, which would have required Gold Dealers to disclose the melt value of their coins and any markups they make over and above this. The legislation passed the House of Representatives but did not get through the Senate before the session expired.
Rep. Weiner plans to reintroduce the legislation, but has said he is "not optimistic" that it will pass the House this time.
In October last year, Rep. Weiner – along with House Commerce subcommittee chairman Bobby Rush (D-Illinois) – issued an investigative report into Gold Coin dealer Goldline International. Goldline's use of endorsements from high-profile conservatives – such as Fox News host Glenn Beck – had led to accusations of conflicts of interest and misleading tactics.
The report described Goldline as "a company that uses conservative rhetoric, high pressure sales tactics and tall tales about the future of gold to sell overpriced coins that can be bought somewhere else for cheaper."
Fox News announced last month that it will phase out the Glenn Beck Show.
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