Goldline’s Representatives Rip Off Consumers, Profit Off Public Fears, Likely Violate Federal Law
Today, Rep. Anthony Weiner (D- Queens and Brooklyn), a member of the House Subcommittee on Commerce, Trade and Consumer Protection, issued a warning about Goldline, Inc., a precious metals dealer that uses aggressive sales tactics, conservative spokespeople and rhetoric to sell over-priced gold coins to unsuspecting consumers.
Goldline, a precious metals dealer in business since 1960, has recently gained prominence through the use of high-profile conservative spokespeople like Glenn Beck, who use their shows to prey on the public’s fears of inflation and socialist takeovers while actively promoting the purchase of gold coins as insurance against this purported government overreach.
Historically, whenever mistrust in global finance and government rises, gold prices follow suit as consumers look to put their savings in something more tangible. And with the number of Americans who are suspicious of government motives near an all-time high, Goldline is using these public fears to sell their over-prices coins. Simply put, Goldline is little more than a gold peddler posing as an investment advisor, an unfortunate byproduct of the Tea Party movement.
Goldline peddles both precious metals and misinformation. Worse still, it’s a bad deal. The gold dealer uses high-pressure sales tactics and overly optimistic assessments of future gold prices to sell coins that can be bought elsewhere for far less – and its sales practices likely violate both SEC & FTC regulations.
Key Findings of Weiner Investigation:
· Goldline Grossly Overcharges For Their Coins
An investigation by Weiner’s office found that 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 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” (the industry term), 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
On numerous occasions, Glenn Beck 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 tri-fecta of terrible business practices,” Weiner said. “It’s unacceptable that this company is preying on public fears to sell its products.”
Rep. Weiner who sits on the 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 to fully disclose their dishonest business practices. Under Rep. Weiner’s plan, Goldline would be required to show consumers its full business model including their astronomical markups, and deceitful promises of profitability.
The full report can be found here.