Saying ?The conduct in this case is outrageous,? an attorney has filed a lawsuit on behalf of 15 consumers from 10 states against a group of Texas companies for fraud and deceptive trade practices in the marketing of ?rare? coins.
In a lawsuit filed Feb. 9 by Gibson Law Firm, Houston, Texas, in state court in Beaumont, Texas, 21 affiliated companies and individuals are accused of using high-pressure, unlawful telemarketing tactics to convince senior citizens and others to to buy gold, platinum and silver coins of dubious worth and origin, access retirement savings, obtain home equity loans, or liquidate assets such as stocks, bonds or real estate.
The defendants are also are accused in the civil complaint of making unauthorized charges to credit cards, sending unordered coins to customers, fabricating information about the origin and current and likely future value of coins, and not honoring return guarantees.
The defendants include Universal Coin & Bullion, Ltd., 1st American Reserve, 1st Capital Reserve, 1st Fidelity Reserve, and 1st National Reserve, among others. The companies operate out of Beaumont, Texas, and gross an estimated $300 million annually, according to the lawsuit.
The 15 plaintiffs are from Alabama, California, Florida, Louisiana, Michigan, Illinois, Nebraska, Ohio and Texas, and spent $3.4 million on coins marketed by the defendants.
?All the companies operate out of the same building,? Gibson said. ?This is a company that trains its people to do or say whatever they have to to make a sale. Everything from the 9/11 tragedy to the natural fears of the elderly was invoked to induce sales. Several of our clients are in their 80s and one has Alzheimer?s disease.?
Gibson said one of the accusations in the lawsuit is selling customers expensive coins, or ones they do not have in their possession, and then sending them similar, but less expensive coins.
He said this is the fourth time he has had dealings with Universal and its affiliates.
?I represented a couple from Illinois last year that invested $800,000,? he said. ?We reached an out-of-court settlement last September.?
He said the amount could not be disclosed, but did say the couple did get their money back. The other two cases also resulted in out-of-court settlements.
The plaintiffs are seeking damages of $500 million, including trebling of damages allowed under the Texas Deceptive Trade Practices Act.
Calls to Universal had not been returned as of press time.