Just about any coin dealer who has been actively in business for any length of time has been contacted by people who have been taken advantage of by high-pressure rare coin marketers. Unfortunately, a disproportionately large number of these victims are senior citizens who may not always have strong mental faculties. Further, because a high percentage of senior citizens are trustworthy, they may be overly trusting of other people.
I have dealt with hundreds of collectors in my more than 50 years as a collector and dealer. In almost all circumstances, the other parties have been upright and fair.
However, last week my company did what we could to help a victimized gentleman in his 80s. He was brought to our store by a lifelong numismatist friend and one of the victim’s relatives. This gentleman had paid out more than $100,000 this year to purchase rare coins, which in our judgment, could not be liquidated today for more than $35,000.
The particular company has an A+ rating from the Better Business Bureau even though the BBB notes that the company paid a large fine to the Federal Trade Commission a few years ago to settle FTC charges that the company deceived consumers. On the company’s own website, there are a handful of glowing reviews from people who supposedly visited the business in person. However, other website reviews are mostly strongly negative.
About $50,000 of the customer’s merchandise was purchased 57 days ago. The company claims to offer a refund within 60 days. When the lifelong numismatist friend was brought in by another family member to examine the coins, he easily determined that the best course of action was to return everything possible to get the refund.
But, as you might suspect, when the company was called the employee on the phone said that returns could not be sent without authorizing paperwork. Further, the company representative said that the only staff member who could prepare that document was out for another week. The person on the phone claimed that the delay, which would then exceed 60 days, would not cause a problem in getting the refund. I would not count on that oral promise unless the buyer recorded that telephone call for evidence.
What this coin marketing firm had done with the initial transaction is to obtain the buyer’s banking information so that the seller could initiate an ACH Payment (automated clearinghouse) of the TEL variety. Such payments are arranged when the payer provides bank account information over the telephone. Thus, this seller was able to unilaterally take the funds from the customer’s bank account.
While in our store the victim explained that the sales representative was so persistent, refusing to take no for an answer, that he sometimes finally caved in to approve a purchase just to get the phone call ended. You might wonder why the victim did not just hang up. However, we have listened to many people over the decades tell us just how hard it was to be rude enough to hang up on such caller.
So, what are some steps that can be taken for people to protect themselves from becoming a victim of a high-pressure coin marketer?
The first rule, which applies to purchasing almost anything, is to not buy any product, service, or investment that you do not understand.
Second, if you have any possible interest in making a purchase, ask to receive printed information with all the details, especially the fine print, about the potential transaction. If a sales representative is not willing to do so, no matter the pretext, consider that sufficient grounds to avoid making that purchase.
When you do receive written information, make sure that you understand it. If you do not, ask questions and don’t do anything until you do understand the answers. This includes being clear on what to do to cancel a transaction or make a return for refund. Any coin dealer who does not allow returns or would charge a restocking or other fee for a return of a numismatic product probably should be avoided (note that bullion-priced precious metals transactions, because of market volatility, are normally not cancellable or returnable for refund).
Unfortunately, consumer protection organizations report that senior citizens are often victims of shady sales practices. Part of the reason they can be repeatedly victimized is that they don’t want to inform their relatives of their mismanaging their finances for fear that a family member will assume control over their assets.
Once a purchase has been made where the best course would be to make a return to get a refund, the best advice is to follow the seller’s instructions as to timing and the procedure to do so. Then do just that. Even if, for instance, it might be a few days beyond the return period, still contact the seller to see if they are willing to make an exception for customer goodwill.
Generally, I would not send a return for refund without first contacting the seller. I have heard multiple stories of people who returned products and never received a refund.
If, when contacting the seller to arrange for a return and refund, there seems to be a problem with the seller honoring their return policy, make detailed notes as to time, the phone number called, the identity of who you talked with and the nature of the conversation. Note such details for any future contacts with the company.
When checking the merchandise received, check that it matches what was described over the phone or in print. If the item(s) do not match or may be counterfeit, you may want to contact a coin dealer or experienced collector that you trust for independent judgment to confirm your suspicion. If this might be the situation, there may be legal grounds to demand a refund or to pursue a legal matter if the seller will not cooperate. Keep in mind, though, that charging what seems to be an excessively high price is not, by itself, a criminal act.
If there is a problem with making returns and the dollar amount is substantial, it may well be worth using an attorney to write to the seller to work out some kind of resolution. Other possibilities include contacting various consumer advocates that work at various publications and television stations. Also consider contacting the Better Business Bureau, consumer protection staff at your state attorney general’s office, or at the Federal Trade Commission. Search online for the contact information for them. While these latter entities may not advocate on your behalf directly, they can provide information on how victims can pursue resolution. Further, if you do write a letter to the seller on the matter, it would be a good idea to note that you are sending a copy of your communication to these offices.
If the seller is close enough to visit in person, that might also get better cooperation than simply calling on the phone. However, make sure to be careful with the words you use if meeting in person. Honey attracts a better outcome than fire and brimstone.
Should the selling company or any of its principals be members of the American Numismatic Association, the Professional Numismatists Guild, or perhaps other numismatic membership organizations, you may be able to file a complaint with these societies. Both ANA and PNG may offer venues to work toward a resolution.
You may also find that a local coin dealer would be willing to offer some assistance. The overwhelming majority of customer-oriented dealers know that the existence of disreputable firms in the industry tarnishes the image of all dealers.
As you can see, there are many avenues to pursue a resolution. But you must take action – the sooner the better.
If any readers have other suggestions, please feel free to share them.
Patrick A. Heller was the American Numismatic Association 2012 Harry Forman Numismatic Dealer of the Year Award winner. He is the owner emeritus and communications officer of Liberty Coin Service in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at Coin Week (http://www.coinweek.com). His radio commentaries titled “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday and Friday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com).