NY Rep. Warns of Gold Dealer’s Shady Practices

May 18, 2010 Updated: May 18, 2010

NEW YORK—Congressman Anthony Weiner (D-Queens and Brooklyn) issued a warning Tuesday about Goldline Inc., a precious metals dealer that uses forceful sales tactics and rhetoric to sell rip-off gold coins to unsuspecting consumers.

Dating back to 1960, Goldline has recently become popular by using high-profile conservative spokespersons such as Glenn Beck, who use their shows to ignite the public’s fear of inflation, while promoting the purchase of gold coins as insurance.

“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 in a press release. “It’s unacceptable that this company is preying on public fears to sell its products.”

Historically, whenever doubts in global finance and government rise, consumers are more attracted to something more tangible, namely gold. At a time like this, with the number of Americans who are suspicious of motives of the government near an all-time high, Goldline is taking advantage of public fears to sell overpriced coins, according to Weiner’s office.

After doing an investigation, Weiner’s office found that Goldline markup is 90 percent above the melt value of the coin and 47 percent higher than that of its better-priced competitors.

The company’s salespersons imply that they are “financial advisers” by offering investment advice, which suggests that they have some sort of responsibility to get you the most return on your investment. However, since they are not officially “financial advisers,” they don’t actually have such responsibility.

In 2006, the Missouri secretary of states' office, Securities Division, filed a formal consent order against Goldline and recovered over $200,000 for an elderly consumer that had been ripped off.

Weiner, who sits on the Subcommittee on Commerce, Trade and Consumer Protection, wrote letters to the Securities and Exchange Commission (SEC) and Federal Trade Commission (FTC) requesting that they investigate Goldline and is proposing legislation that would force Goldline to fully disclose their business practices.