On Oct. 23, 2017, U.S. District Court Judge Otis D. Wright II granted the Federal Trade Commission’s (FTC) request for summary judgment against a gold and silver marketing operation that allegedly cheated thousands of consumers out of their family trust and retirement savings.

In June of 2016, the FTC filed a complaint against the Defendants alleging that they marketed gold and silver as investments, but often failed to deliver the goods to the customer. The Defendants are Discount Gold Brokers and North American Discount Gold.com. The FTC alleged that the Defendants defrauded their customers by offering gold and silver at discounted prices, with zero commissions, fees, or expenses, and at zero percent above dealer cost, but the customers never actually received the gold and silver they purchased. The Defendants allegedly required up-front payment via check or wire and some consumers used their family trust or retirement savings to buy the precious metals, with individual orders ranging from $1,000 to $300,000. After paying thousands of dollars, hundreds of consumers reported that they never received their orders.

Through the filing of its complaint, the FTC sought to recoup the money the Defendants stole from the customers through their scheme. The FTC charged the Defendants with violating the FTC Act and the FTC’s Mail, Internet or Telephone Order Merchandise Rule, which requires sellers soliciting orders via mail, internet, or phone to have a reasonable basis to expect that they can ship merchandise within any advertised time frame, or within 30 days if no specific time frame is promised. The Rule also requires that, when the promised shipping time cannot be met, the seller must obtain the buyer’s consent to a shipping delay or cancel the order and promptly refund payment for the unshipped merchandise.

On Oct. 23, 2017, Judge Wright issued a final judgment and order banning the Defendants from selling investment opportunities, misrepresenting any good or service, and violating the FTC’s Mail, Internet or Telephone Order Merchandise Rule. The order imposes a judgment of $6,526,559 against the Defendants, which represents their unjust gains between 2012 and 2014.

Beasley Allen handles a variety of fraud cases. If you have any questions about this article or even potential fraud cases, please feel free to contact Ali Hawthorne, a lawyer in our firm’s Consumer Fraud & Commercial Litigation Section, at alison.hawthorne@beasleyallen.com.

Source: Federal Trade Commission

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