Golden fleece?

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The Treasure of the Sierra Madre. The Italian Job. The Lords of the Rings. The quest for gold is a common theme in action films. But for many consumers who sent money to Encino, California-based Discount Gold Brokers, a lawsuit filed by the FTC alleges that the adventure has turned into a horror movie.

According to the complaint, the defendants ran a TV and radio campaign on CNN, Fox News, Fox Business Network, and other national outlets pitching gold and silver as a safe retirement investment and claiming to offer precious metals at “discounted prices.” Encouraging people to “protect themselves” by being “smart investors,” the defendants promised “zero commissions, fees, or expenses.” 

Based on those claims, the defendants collected more than $33 million from consumers, many of whom used their retirement savings.

So where was the gold? It may have been in them thar hills because it certainly wasn’t in the hands of customers, many of whom never received the investment metals they ordered.

Discount Gold Brokers initially told buyers to “allow a minimum of 2-4 weeks for delivery of your product upon the clearing of your funds.” After weeks went by with no gold in sight, the FTC says consumers who contacted Discount Gold Brokers were given a litany of excuses. It’ll “ship soon,” there’s been a “shipping mix-up,” or we’re experiencing a “backlog” were three of the most popular.

That’s also when consumers started having difficulty reaching the company by phone. Some people reported that the defendants’ line answered only if they called from a number different from their own – a tactic we’ll put in the “Things That Make You Go Hmmm” file. (And yes, we have one.)

Pending in federal court in California, the complaint alleges violations of Section 5 of the FTC Act and the Mail, Internet, or Telephone Order Merchanise Rule. The lawsuit names the corporation and three individuals – Donald Dayer, Katherina Dayer and Michael Berman. The allegations raise concerns about Mr. Dayer and Mr. Berman’s potential status as “frequent fliers,” given that they also were defendants in a 1996 action brought as part Project Roadblock, a coordinated sweep by the FTC and state securities regulators targeting fraudulent investment schemes for FCC licenses for paging and 900 numbers. (Remember paging? Remember 900 numbers?)

Entrepreneurs can glean two points from the pending case. First, if it’s been a while since you’ve considered your company’s obligations under the (now anachronistically nicknamed) Mail Order Rule, read the complaint for a refresher. Second, purveyors of iffy investments often target people looking to multiply a moderate nest egg or retirement account. No matter how much business savvy a person has, when it’s your money on the line, investigate thoroughly and seek a second opinion from a prudent colleague before entrusting a dime to anyone offering an investment opportunity.

 

Comments

Ohhh. . My word. ..? Left me saying Hummm? Thanks F.T.C. for that file. Good to know. But , I'm just amazed at all the work your doing 24/7. Trying hard to protect the consumers in this wacky crazy world we live in. "WOW" read the complaints, really it was a What were people thinking? I read all fine prints in all I get. I'm a resident of California & that matter is never metioned here? Maybe they already know we whom live here knows enough not to fall for such a lie. I hang up on all telemarketers! I also, back track , check them out? Them send them packing. A don't call here works when your educated in thievery behavior.. That's so sad to read about those whom lost monies in such a reckless decision making some people will do? When it sounds to good to be true? True around and run from criminals like these guys are. Thank-you! To the F.T.C. teams without your help we" d all be lost or killing each other over wrongful. Moves. We love you FTC. WOW..l.t.d....ca.

What goes around comes around.. These victims probably will never receive a dime back, but the FTC needs to ensure that these repeat serial CRiMINALS, do hard time in jail instead of hiding behind White Corporation Laws....

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