A class action alleges GovMint.com has preyed upon “unwary, and often elderly,” collectible coin buyers despite being forced to revise its quality assurance program and sales practices and pay civil fines in 2016.
A proposed class action alleges GovMint.com has continued to prey upon “unwary, and often elderly,” collectible coin buyers despite being forced to revise its quality assurance program and sales practices and pay civil fines around five years ago.
The 23-page complaint alleges defendant Asset Marketing Services, LLC has “a track record of engaging in fraudulent and unconscionable business practices” and has continued to do so at the expense of unwitting, often elderly consumers, who’ve allegedly lost millions to the company due to its apparent misrepresentations of the supposedly collectible coins its sells. The case alleges Asset Marketing Services’ sales tactics have relied in part upon consumers’ misapprehension and lack of understanding about the coins for sale and its fraudulent omissions of facts about the purported investments.
“Defendant marketed and sold coins to Plaintiffs and the Class in a deceptive and misleading manner,” the suit charges. “As described above, Defendant systematically and regularly engaged in selling coins, overpricing them, obfuscating and concealing their true value, and convincing an unwitting public that the coins are valuable and worth what they are charging for them.”
The case claims GovMint.com has failed to bring its sales tactics into compliance with orders from the Minnesota Department of Commerce, which cited the company in 2016 and assessed against it $30,000 in civil penalties and investigative costs, and continues to violate Minnesota law by soliciting sales of bullion coins based on misrepresentations of the “material aspects of the coins sold, including their performance, efficacy, nature, investment value, central characteristics, liquidity, earnings potential, and profitability.”
The two plaintiffs, Tampa, Florida and Loomis, California residents, respectively, are described in the lawsuit as elderly and living on a fixed income, and not in a position to “work or otherwise earn money if their savings run out or are absconded with by fraudsters.” According to the lawsuit, the plaintiffs, between 2015 and 2019, were solicited by GovMint.com more than 50 times by phone and email correspondence.
The Tampa plaintiff, the suit says, was contacted by a senior executive account manager for the defendant, who asked if the man wanted to invest in certain commemorative coins. When the plaintiff expressed his interest, the account manager, according to the lawsuit, offered the man “material information about several coins”; prior to that, the plaintiff “knew nothing about commemorative coins,” the case says. Thereafter, the employee sent the plaintiff a sample of gold, and the man, based on this and other representations, “assumed he was investing in gold and precious metals,” the lawsuit claims.
According to the suit, the Tampa plaintiff, during his phone calls with the defendant, was induced into buying “127 coins at a price of over $630,000.00.” The plaintiff gave his credit card information over the phone yet was not asked, told or offered to review anything on GovMint.com or any other written materials, or asked to sign anything, the case claims.
“In one purchase, [the plaintiff] paid over $38,995.00 for a single coin,” the suit says. “However, subsequent appraisals show that the coins are worth less than 1/3 of what [the plaintiff] paid.”
Asset Marketing Services never told the Tampa plaintiff that the market value of the coins was worth substantially less than what he was buying, or that the market for the coins would have to “double and double again” for him to even recoup the value of his ostensible investment, the lawsuit alleges. What the man bought instead, according to the complaint, were coins with only “novelty value,” essentially keepsakes, and not investments that could appreciate enough to warranty what the plaintiff paid for them.
“It was never explained to [the plaintiff] that his purchases would not result in any profit if he decided to sell the coins he thought he was purchasing to ensure financial security,” the suit attests.
In an allegedly similar scenario, the Loomis plaintiff was contacted by her “personal” account manager and solicited about investing in certain commemorative coins, the case continues. After receiving “material information” about the commemorative coins, the plaintiff decided to make a purchase, and was “induced” into spending over $13,000 for 10 coins, the lawsuit says. Per the case, the plaintiff, who was allegedly told she “could potentially realize a 400% return on the purchase of these coins,” gave the defendant’s agent her checking and savings account number over the phone without being asked to review anything on GovMint.com or sign anything.
As the lawsuit tells it, the plaintiffs are far from the only consumers who have been scammed by Asset Marking Services. From the complaint:
“The foregoing are not the only examples of Defendant’s deceptive sales tactics. Public sources of information are rife with victims of this scam.”
According to the case, commemorative coins are typically minted with a quarter or half ounce of a precious metal to commemorate a special event or notable person. The value of commemorative coins typically does not fluctuate with the value of the underlying precious metal, the suit adds. Commemorative coins, however, have “dubious numismatic value” as a long-term investment vehicle when priced high, and an individual’s ability to recoup their investment in the coins “has never been proven,” the lawsuit says.
Overall, the defendant has wholly failed to comply with the Minnesota Department of Commerce’s orders with regard to GovMint.com’s sale of bullion coins, the lawsuit alleges. The case looks to represent all individuals in the United States who bought one or more coins from either GovMint.com, or any of its affiliates, successors, predecessors or assigns, from 2015 until the present.
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