Texas Attorney General Issues Consumer Tips
Texas Attorney General Issues Consumer tips:
Buying Gold Coins
Attorney General's from across the country should follow the lead of Texas Attorney General Ken Paxton.
Texas Attorney General Issues Gold Coins Consumer Protection Tips
With input from numismatic experts, the Attorney General of Texas, Ken Paxton, has issued a consumer protection alert about buying and selling gold coins.
Award-winning rare coins and precious metals writer, Michael Fuljenz, President of Universal Coin & Bullion in Beaumont, Texas, provided continuing consultation to the attorney general's office on this important consumer alert. Fuljenz, in coordination with other key numismatic industry leaders, offered guidance on consumer protection best practices for precious metals consumers.
The advisory notes that senior citizens make up about 14% of the U.S. population but account for 60% of the callers to the National Fraud Information Center.
Paxton's advisory cautions consumers and investors: "If coins you bought as an investment would have to double or triple in value before any gain could be realized, you may have been a victim of fraud."
Entitled "Consumers Should Do Their Research Before and After Investing in Gold Coins," the advisory emphasizes the crucial importance of working with reputable dealers to help avoid paying too much when buying or receiving too little when selling. Paxton's office recommends researching dealers through the Better Business Bureau, the American Numismatic Association, the Professional Numismatists Guild, Professional Coin Grading Service and Numismatic Guaranty Corporation.
"By issuing this important consumer protection advisory, Texas is not only assisting Lone Star state residents but providing nationwide benefits to the public who can access this useful information online. Attorneys general across the country now also have a template to provide consumer protection advice to their residents about buying and selling gold bullion and gold coins," said Fuljenz.
Among other tips in the Texas Attorney General's advisory:
Do not respond to callers not previously contacted. Cold callers often are not registered in Texas to legally telemarket and often try to pressure customers to act quickly.
Do not do business with a dealer who guarantees your purchases are totally safe, will go up in value or can't go down, stresses government gold confiscation or says he will buy them back for what you paid at any time.
The full consumer protection advisory from Texas Attorney General Paxton is available online and as a printable PDF document at www.texasattorneygeneral.gov/cpd/gold-coins.
Consumers Should Do Their Research Before and After Investing in Gold Coins
For much of human civilization, gold has ignited the imagination of investors. That enchantment continues to this day as surges in the price of gold have made the commodity seem like an attractive alternative to more volatile markets. While there are many reputable dealers in gold, this market’s desirability and investment potential makes it vulnerable to fraudulent business practices.
If you have been thinking about buying or selling rare or bullion-value products containing precious metal, the Attorney General of Texas has three words for you: research, research, research. Before entering into a transaction, you need to research online the background of the coin dealer including how long they have been in business and Better Business Bureau (BBB) rating and number of BBB complaints. You should also independently verify the dealer’s membership and status in leading industry organizations. That advice applies to all transactions whether done by phone, in person, online or by mail.
Leading industry organizations you can contact include the American Numismatic Association and the Professional Numismatists Guild. You might also verify if the dealer is an Authorized Dealer of the PCGS (Professional Coin Grading Service) or NGC (Numismatic Guaranty Corporation), the two most recommended grading services.
Be aware you will probably be buying coins or bars at retail prices and later selling at wholesale prices. Selling in a short period of time often results in losses.
Here are some tips to avoid becoming a victim of fraud:
Seniors make up about 14% of the U.S. population but account for 60% of callers to the National Fraud Information Center. If you are a senior, be extra careful.
If coins you bought as an investment would have to double or triple in value before any gain could be realized, you may have been a victim of fraud.
If a dealer does not pay you, return your coins or deliver your purchased product in 30 days or less, you may have been a victim of fraud. Don’t Delay Action!
Do not respond to callers not previously contacted. Cold callers often are not registered in Texas to legally telemarket and often try to pressure customers to act quickly.
Use credit cards for first transactions, as credit card companies offer extended fraud protection.
Do not do business with a dealer who guarantees your purchases are totally safe, will go up in value or can’t go down, stresses government gold confiscation or says he will buy them back for what you paid at any time.
Counterfeit coins and bars as well as counterfeit grading service holders are a possible risk, especially with online transactions.
Be wary of Home Storage IRA plans, as these have not been thoroughly tested with the U.S. Treasury or IRS. Stick with reputable independent custodians.
Reduce theft risk by storing your coins in a financial institution’s safety deposit box. That institution would also be a safe place to meet buyers/appraisers. Do not allow a relatively unknown dealer/appraiser to remove coins from your sight.
If you believe you were the victim of fraud, do not hesitate to contact the authorities.
Regretfully, due to print limitations, additional buying and selling tips were excluded, said Fuljenz, including avoiding false grading claims, advice about return privileges and urging caution if sellers receive certified money orders or certified checks from unknown buyers because they could be counterfeit. All ten of the additional consumer protection tips are available online at www.MikeFuljenz.com/goldtips.
ADDITIONAL GOLD TIPS TO AVOID BECOMING A VICTIM OF FRAUD
Make sure that any dealers you do qualifying precious metal business with are registered to do business in their state and, when required, registered in their city.
Watch out for false grading claims. Not all rare coin and bullion coin authentication and grading services are the same. The two most popular third-party certification companies are the Professional Coin Grading Service (PCGS) and Numismatic Guaranty Corporation (NGC).
Don’t allow strangers to take your coins from your possession for a free appraisal or certification.
Be careful selling to itinerant dealers who set up in hotels or in temporary locations. They often pay much less to customers.
Keep notes and all receipts, documents, correspondence and shipping records regarding transactions. Require all terms and conditions of transactions be in writing.
Certified money orders and certified checks can be a risk. Don’t accept these from unknown buyers as they may be counterfeits made from one that is genuine. Also, only have money wired to accounts provided only by verified representatives of carefully researched companies.
If you allow a dealer to come to your home, be cautious and have a second person there for the appointment.
Reputable dealers typically offer a 15-day return privilege on rare coins and have a replacement policy for bullion-related coins.
Be wary of uncertified coins offered by vendors in flea markets or other venues where the seller is not a verifiable coin expert. Too often, coins offered there are overvalued, cleaned or counterfeit.
Most auction companies are reputable. Unfortunately, though, a few are not – and you need to use the same due diligence in choosing an auction company – whether you’re buying or selling – as you would in picking a retail coin dealer.
At Fuljenz' request, the following are among the precious metal industry leaders who provided input to him for the advisory. Their names are listed alphabetically with affiliations given only for identification purposes.
Gary Adkins, American Numismatic Association Vice President and former Professional Numismatists Guild President
John Albanese, co-founder of Professional Coin Grading Service, Numismatic Guaranty Corporation and CAC
Doug Davis, Founder of Numismatic Crime Information Center, City Manager and former Police Chief of Pantego, Texas
Beth Deisher, Director of Anti-Counterfeiting for the Industry Council for Tangible Assets and former Editor of Coin World
Terry Hanlon, Dillon Gage Metals President, former PNG President
Jerry Jordan, award-winning investigative reporter and former Texas newspaper editor
Kathy McFadden, ICTA Executive Director
Rick Montgomery, NGC President
Donn Pearlman, public relations consultant, ANA Zerbe Award recipient, former ANA Governor and former journalist/broadcaster
Jay Sheppard, Better Business Bureau Serving Southeast Texas Dispute Resolution Director
Miles Standish, NGC Vice President
Universal Coin & Bullion President Michael Fuljenz has won more than 60 prestigious national and regional awards and honors for his consumer education and protection work in rare coins and precious metals. He is on the Boards of Directors of the influential Industry Council For Tangible Assets, Crime Stoppers of Jefferson and Hardin Counties Texas, and is a member of the prestigious Professional Numismatists Guild which honored him along with Doug Davis and Jerry Jordan in 2016 with its Sol Kaplan Award for helping to fight numismatic-related crimes.
Doug Davis
Founder/President
Numismatic Crime Information Center
Doug@numismaticcrimes.org
