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Consumer Alert:

05/12/2014

Consumer Alert: Precious Metals Investing

 

 

For Immediate Release                                 
Monday, May 12, 2014
 
Contact: Jamie Mongiovi
(850) 410-9709
Consumer Alert: Precious Metals Investing
The Florida Office of Financial Regulation raises awareness about precious metals fraud
 
Tallahassee, Fla. – The Florida Office of Financial Regulation (OFR) encourages consumers to be cautious of unregulated entities that are selling precious metals investments using margin or leverage accounts. The use of margin or leverage refers to the act of borrowing against the equity in an account in order to acquire a larger investment than the consumer could otherwise afford. In some cases, scammers tell consumers that they can earn large profits quickly by investing in precious metals such as silver, gold, platinum and palladium, without fully disclosing the fact that these investments are being made with large amounts of borrowed money. In addition, consumers do not know that this borrowed money must be repaid quickly if the metals decline in value.
 
The result is that consumers are often shocked to find out that their entire investment can be lost in a very short amount of time. Floridians should be wary of sales pitches, particularly those made over the phone, and marketing materials claiming precious metals are low-risk investments because they are tangible, physical assets such as bars, bullion and coins.
 
Commonly, the promised metals are never delivered to consumers because these companies claim that the metals are warehoused in third-party depositories or offshore locations. So instead of receiving gold or silver in exchange for their investments, consumers find that their funds are depleted by fees, commissions and margin calls that are not clearly disclosed to them. In the worst cases, consumers become the victims of outright theft where unscrupulous sales agents take their money and never invest in any precious metals.
 
The easiest way to avoid these types of scams is to research the company before doing business. It’s a red flag if the companies and/or sales people are not registered to sell investments and commodities with any state or federal securities or commodities regulator.
 
If you feel that may be a victim of fraud or to report suspicious activity, please file a complaint with the OFR online, www.flofr.com, or call (850) 487-9687.
 
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