Catherine Ngai
Spot gold prices have increased greatly in the last few months, hitting a high of $1297.50 Thursday.
WASHINGTON – A proposal that would force gold-selling companies to provide full disclosure to consumers on everything from the value of the metal to the value at which consumers can resell would force honesty on a TV gold industry built on “fears, lies and rip-offs,” the bill’s sponsor told a House hearing Thursday.
Rep. Anthony Weiner, D-N.Y., introduced The Precious Coins and Bullion Disclosure Act after the Federal Trade Commission and the Better Business Bureau received more than 100 complaints from consumers who said they’d been deceived or pressured into buying overpriced gold coins at Goldline International Inc. and another company.
According to claims filed, consumers concerned about the economy were convinced by Goldline’s commercials and advertisements. However, consumers complained about deceptive sales pitches or false promises and bought coins that were much lower than the actual value of the coins, also known as melt value.
“Should middle-class Americans who are being exploited every single day by this company and this industry be stopped and protected by legislation?” Weiner asked the committee.
Gold prices have reached record highs because gold is seen as a safe haven for investors in bad times. Gold futures on the New York Mercantile Exchange’s Comex division reached a high of $1,297.50 an ounce Thursday for December delivery, approximately up 9 percent from two months prior. Spot prices hit $1,292.91 an ounce.
Fox TV’s Glenn Beck publically endorses the company on air and encourages consumers to buy gold on his show, in which Goldline is a big advertising sponsor. As well, Goldline has been tied to Mike Huckabee, a former Arkansas governor and Republican presidential candidate, as well as other conservative politicians. The Santa Monica, Calif.-based company is under a joint investigation by the Santa Monica City Attorney’s Office with the Los Angeles County District Attorney’s Office.
Scott Carter, executive vice president of Goldline, defended his company by claiming that there is adequate information provided to consumers about the risk involved in buying gold, and says that his company is meeting industry standards.
However, not everyone is convinced that it’s just about gold coins.
“There are politics going on here,” said Rep. Steve Scalise, R-La. “It’s because of out of control spending in Washington [by the Democrats].”