| I am the crown prince of Nigeria, writing to offer you|
Goldline International is a gold dealer that Glenn Beck shamelessly plugs on his radio show after apocalyptic ranting about the future of America. Goldline is, of course, perfectly happy to take those worthless greenbacks off of your hands and give you the gold that they would otherwise use for the coming post-apocalyptic future.
Its business is to sell gold coins for investment purposes at coin collector prices, rather than the far lower investment (bullion) price of gold. One of the major concerns is that would-be gold bullion investors who are scared about possible hyperinflation are convinced to instead buy gold coins at inflated prices. There is concern that investors are being misled away from buying gold bullion on the basis of a now repealed executive order that meant all gold apart from coins could be confiscated by the federal government. If true, this would represent misleading and deceptive conduct.
A Congressional hearing into Goldline's sales tactics was convened on 23 September, 2010. Rep. Anthony Weiner, the New York Democrat who called the hearings, described Goldline sales tactics as a "profound rip-off". In addition, according to court records three Goldline sales associates were sued by the Securities Exchange Commission in the 1990s on allegations that they used "boiler room" tactics and deceptive mass mailings to defraud elderly investors out of $1,180,000 over a period 13 months.
Goldline (and many other similar services) likes to advertise their product as inflation proof and a totally safe investment that will always go up. This latter part is certainly not true. Indeed, gold reached an all-time high of $1900.30 per Troy ounce on 5-Sept-2011, and was trading below $1400 per Troy ounce by October of 2013. Gold is a commodity and like any other commodity it could reach such an expensive price that nobody is willing to pay. The result is a bubble bursting, the price falls and gold, despite being very shiny, is no longer worth what the investor paid for. There is precedent for this sort of thing. In 1980 brothers W. Herbert and Nelson Bunker Hunt attempted to corner the silver market. In 1979 silver prices soared from $6.00 an ounce to a high of $48.70. Knowing the price would tumble, investors shorted silver and the price started tumbling. The resultant crash of the commodities market became known as "Silver Thursday."
In February of 2012, Goldline settled a lawsuit with the Santa Monica city attorney's office, agreeing to refund its former customers up to $4.5 million.
The company often uses scare tactics about a sudden catastrophic economic collapse where gold will be the only thing left of real value when the US dollar is sunk (outside of beans and bullets). Strangely, Goldline only accepts payment in the form of the currency they discount in their ads as soon to be worthless for their precious metal artifacts.
- Jess Bachman has created a graphic showing how the scam works.
- There are two main types of complaints we're seeing Adam Radinsky, an attorney with the Santa Monica City Attorney's Office, told ABC News One is that customers say that they were lied to and misled in entering into their purchases of gold coins. And the other group is saying that they received something different from what they had ordered.
- ABC News: Goldline Hired 3 'Boiler Room' Salesmen Sued By SEC.
- Goldline Agrees to Refund Up to $4.5 Million to Former Customers, Los Angeles Times