Goldline’s Web site.Most of us have seen advertisements to buy gold or offering cash for gold. With the economy still unsettled and gold prices steadily rising, you may be tempted.
But not all gold investments are safe.
On Tuesday, Representative Anthony D. Weiner, a Democrat from New York, attacked one company that is a gold and precious metals dealer, Goldline International Inc. He accused the company of “shady practices,” alleging that it overcharges for collector coins and provides misleading financial advice to consumers. “They’re exploiting the economy that we’re in,” he said.
Mr. Weiner also spoke of the company’s “unholy alliance” with television and radio personalities like Mike Huckabee, the former governor of Arkansas and Republican presidential candidate; and Fred Thompson, a former Senator from Tennessee and TV actor. But he particularly singled out Glenn Beck, the conservative talk show host.
“It’s debatable whether gold is a good investment,” Mr. Weiner said at a news conference in front of the Mercantile Exchange building in lower Manhattan. “There’s a confluence between a declining economy and the ignorance many consumers have about how the marketplace works.”
But is Goldline the bad guy here?
The Better Business Bureau, which has given Goldline an A+ rating, said Tuesday that it was standing by that. A representative of the bureau said it had recently re-reviewed Goldline in response to Mr. Weiner’s accusations and saw no reason for a change. “It’s a company with not that many complaints,” said Gary Almond, from the bureau. When compared with other companies that sell gold, “there was a remarkable difference in how each one addressed complaints,” noting that some of those other companies had F ratings.
Goldline itself disputed Mr. Weiner’s allegations. In an interview, Mark Albarian, the president and chief executive of Goldline, said that the figures that Mr. Weiner gave out — that the average markup for a Goldline coin was 90 percent above the melt value of the coin — were inaccurate. He said the company’s markup on coins ranged from 5 percent for bullion coins to a maximum of 54 percent for rare or historic coins.
“We don’t guarantee that people can make a profit,” Mr. Albarian said, adding that buyers are encouraged to hold on to the coins for at least three to five years before trying to resell.
A report distributed by Mr. Weiner on Tuesday also claimed that Goldline’s salespeople misrepresented their ability to give “investment advice” since they are not certified financial advisers. “We don’t have a fiduciary duty,” Mr. Albarian said in response. “Our reps are not trained to give investment advice.”
But Mr. Weiner spent some time at his news conference criticizing “public programs to advocate for gold followed by advertisements for gold.” That was a reference to Mr. Beck, who is a proponent of buying gold. Goldline is also an advertiser on Mr. Beck’s television show.
The issue has been raised in the past, and the company has said that Mr. Beck reads advertisements for Goldline on his radio show but is not a paid spokesman. Christopher Balfe, the president and chief operating officer of Mercury Radio Arts, Mr. Beck’s production company, said: “Glenn used Goldline before they became a radio sponsor and as his listeners know he only does live radio reads for companies he uses and trusts.”
Mr. Thompson issued this statement in response to a request for comment.
“The runaway spending policies of Congressman Weiner and his international soul mates drive up gold prices and he blames talk radio? Apparently, those correspondence courses in economics are letting him down again. Frankly, I am outraged that he thinks me so crass as to use every opportunity to pitch a product … and by the way, my new book,”Teaching the Pig to Dance” is in bookstores today, or from my Web site: teachingthepigtodance.com.”
So what’s a gold consumer do to?
John Breyault, vice president of public policy at the National Consumers League, offered three consumer tips at Tuesday’s news conference:
Guaranteed profits are an illusion.
Go to the Internet and read up on gold buying.
Get unbiased financial advice.