California based, Goldline International, Inc. was recently accused of deceptive sales practices in a lawsuit filed in the United States District Court of South Carolina, Greenville Division. More specifically, the plaintiffs charged Goldline International with violating the Racketeer Influenced and Corrupt Organizations Act (RICO) and for the use of unfair and deceptive trade practices and unjust enrichment.
According to the complaint, the plaintiffs took the action to recover for the economic loss suffered by the plaintiffs as a result of Goldline’s systematic scheme to fraudulently induce market-wary consumers into purchasing numismatic coins and bullion at grossly inflated prices.
As indicated in the complaint, Goldline grossly overcharges its customers for numismatic coins and bullion. According to a recent Congressional study, the average Goldline markup was 90% above the melt value of the coin, and the largest markup on a coin was 208% above the melt value. Moreover, it is alleged that Goldline and its spokespeople “represent that purchasing Goldline products is a good investment by portraying them as a hedge against the declining value of the U.S. dollar. However, using this premise to charge an inflated price is fraudulent and deceptive for several reasons. First the investor is not getting a true hedge because the value of the dollars she/he spends is decreased at the root of the transaction by grossly overpaying for numismatic coins and bullion, which undermines the reason the investor enters the transaction in the first place. Second, the numismatic coins (collector coins) Goldline pushes hardest have the least melt value, and having precious metals with a high melt value is the entire premise of hedging against the value of the U.S. dollar according to Goldline. But at every stage of the marketing and sales process, Goldline employees and its spokespeople uniformly represent to the consumers that they cannot lose on these investments.”
To fully understand how Goldline markets its products and the fees and charges that the investor is exposed to, you can review a copy of the complaint contained within this post.
In response to the complaint, Goldline filed a Motion to Stay Deadlines, Entry of Scheduling Order, and any Obligation to Answer or Otherwise Respond Pursuant to Federal Rule of Civil Procedure 12(a) and (b) to the Complaint Pending Resolution of Motions to Compel Arbitration. A copy of this motion is also included within this post. However, the order that was entered by the court, on the motion, deserves its own post, which must be read if the reader is contemplating taking action against Goldline.
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