Advertisements may pitch gold and silver as a safe haven from a volatile stock market and shaky economy, but a federal agency said Friday a metals marketing operation provided the danger to consumers — by bilking them for millions of dollars.
One clue that should have raised warning flags: The company sometimes asked customers to wire money up front, the Federal Trade Commission said.
“Legitimate businesses will never ask you to wire money – it’s a sure sign of a scam,” an FTC advisory warns. “And, if you’re thinking of investing, learn about what questions to ask and what to avoid.”
Defendants operating as Discount Gold Brokers offered gold and silver “at discounted prices,” with “zero commissions, fees, or expenses,” and at “zero percent above dealer cost,” according to the FTC. Many consumers used their retirement savings to buy the precious metals, with orders ranging up to $300,000, officials said — but hundreds complained that they never received the orders.
“The losses in this case are significant, particularly to those who lost their retirement savings,” said Jessica Rich, the Federal Trade Commission’s director of the bureau of consumer protection. “The FTC will not rest until it has recovered as many of these lost funds as it possibly can for consumers.”
The defendants include DiscountMetalBrokers Inc., formerly known as Discount Gold Brokers Inc. and Discount Metal Brokers Inc., and doing business as Discount Gold Brokers and North American Discount Gold.com; Donald Lee Dayer; Katherina Dayer; and Michael Scott Berman. Attempts to reach them or attorneys were not successful.
U.S. officials say the company is no longer operating, but plenty of pitches to buy gold and other metals are out there. Federal officials urged caution to sort out scams from legitimate opportunities.