Austin-Based
Firms Using Ads to Sell Coins May Be Peddling ‘Fool’s Gold’
Austin,
TX - March 17, 2011
– Consumers nationwide should be on the alert for advertisements from two
Texas-based companies that are using newspapers to sell gold bullion coins
“completely free of dealer mark-up,” Better Business Bureau (BBB) warns. The
companies appear to be using the ads to entice consumers to buy more expensive
“collector coins” at prices significantly higher than they could be bought
elsewhere.
The
companies are United
States Rare Coin & Bullion Reserve and United
States Coin and Gold Reserve, both with addresses in the same office
building in Austin, Texas. Colt Verret is a former sales manager for United
States Rare Coin & Bullion Reserve and is the current president of United
States Coin and Gold Reserve, which also uses the name United States Gold Coin
Exchange, LP.
United
States Rare Coin & Bullion Reserve took out a full-page ad in the St. Louis Post-Dispatch
in January and The
Cincinnati Enquirer in February. United States Coin and Gold
Reserve recently took out full-page ads in several additional newspapers,
including the Post-Dispatch,
the Belleville, Ill., News-Democrat
and The Boston Globe.
All of the ads have striking similarities including sections where the ad copy
is identical.
Carrie A.
Hurt, BBB president and CEO, says the advertisements invite consumers to call
toll-free phone numbers to speak with company salesmen, called “gold advisors.”
“These
seem to be typical bait-and-switch ads where the salespeople use the initial
offer to convince callers to buy higher grade, so-called collector coins, at
highly inflated prices,” Hurt explains. “There also is concern that these
salesmen may be targeting senior citizens, some with little or no knowledge of
the gold market.”
BBB is
also concerned with the content of the companies’ advertising, which pictures
the U.S. Capitol building and which could lead consumers to believe the
companies have an affiliation with the U.S. government.
An
investigator with BBB called the toll-free number listed on the Belleville
advertisement and spoke with a salesman who identified himself as a senior
investment advisor and senior gold advisor with United States Coin and Gold
Reserve. He said that people are “fed up” with low interest rates offered by
banks, and retirees are “looking for a better way to save money.” He said he
works largely with retirees.
While the
salesmen said he could sell some of the advertised coins, he recommended that
between 85 and 90 percent of a gold investment portfolio be in what he called
“congressional proof, extremely high-grade, collectible coins that tend to
appreciate far better than bullion does.” He said the coins contain ¼
ounce of gold and could be purchased at a cost of $639 each, or $12,780 for a
tray of 20 coins.
The price
he quoted for the coins is markedly higher than the price they could be bought
elsewhere, according to research conducted by an investigator with BBB. A
longtime Texas-based coin dealer, Danny
Hall, said his business would sell the same high-grade coins for approximately
$398 each, or around $7,860 for a tray of 20 coins. A check of prices on the
online site eBay shows the coins selling for between $335 and $420 each.
Hall called the price being charged by the Austin coin company “inflated” at
$639. He further emphasized these coins are not considered to be particularly
collectible, but simply a purchase of gold.
BBB is
currently working with United States Rare Coin & Bullion Reserve to confirm
substantiation of the claims in their advertisements.
Consumer
complaints received by BBB allege that they purchased coins from United States
Rare Coin & Bullion Reserve, but the purchase amount was far more than the
amount the coins were later appraised. The company generally responds by
offering consumers the option to return the coins for a refund. Consumers have
filed more than 40 complaints against United States Rare Coin & Bullion
Reserve in the past 36 months.
Click here
to view the current BBB Business Review on United States Rare Coin &
Bullion Reserve and here
to view the current BBB Business Review on United States Coin and Gold Reserve.
BBB
offers the following tips to consumers looking to buy coins as investments:
· Research Gold-Buying Businesses in
Advance.
Before buying anything, make sure you know the name of the company, its address
and, preferably, the company’s top officials. Check out the company’s BBB
Business Review at www.bbb.org
for additional insight.
· Do Not Make An Immediate Decision.
Some sales representatives may push you to buy during their initial
presentation, but do not buy anything until you have had an opportunity to
compare their prices with prices offered by reputable coin dealers in your
area, or through Internet auctions.
· Compare Prices Carefully.
When you compare prices, make sure you are comparing identical items. A vintage
$5 gold coin, for instance, is usually worth more than a newer $5 gold
coin. The value of coins minted the same year likely will vary depending
on the condition.
About Better Business Bureau:
BBB's mission is to be the leader in
advancing marketplace trust. BBB accomplishes this mission by creating a
community of trustworthy businesses, setting standards for marketplace trust,
encouraging and supporting best practices, celebrating marketplace role models
and denouncing substandard marketplace behavior.
Businesses that earn BBB
Accreditation contractually agree and adhere to the organization's high
standards of ethical business behavior. BBB is the preeminent resource to turn
to for objective, unbiased information on businesses and charities.
Contact BBB serving
Central, Coastal and Southwest Texas at (512) 445-4748.
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