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Santa Monica-based Coin Company Refunds more than $4.25 million to Customers  

 

By Lookout Staff

April 19,2012-- Goldline International, Inc., one of the nation's largest gold coin dealers, has refunded a total of more than $4.25 million to former customers under a court injunction won by the City of Santa Monica in February.

The customers, who returned their coins to the company, were the victims of a bait-and-switch operation allegedly run by Goldline. The Santa Monica-based company has also paid $800,000 into a separate fund, which will be used to pay other customers' restitution claims.

"Under that fund, eligible consumers who claim they were misled by Goldline may receive cash to offset the difference between their original purchase price and the current value of their coins," said Adam Radinsky who heads Santa Monica's Consumer Protection Unit.

"Consumers will not have to return their coins to be eligible for the program," Radinsky said.

The injunction was the result of a 19-count criminal complaint filed by the City filed in October charging Goldline -- which has been under investigation by local authorities in California since 2010 -- with running a bait-and-switch operation.

The Santa Monica-based company was accused of "using false and misleading claims" to get customers seeking to invest in gold bullion to switch to coins priced as much as 55 percent higher than their actual value.

Under the February's judgement, the criminal charges filed by the City Attorney's Consumer Protection Unit were dismissed and a Monitor was appointed to ensure Goldline’s compliance.

The injunction -- which goes into effect on April 22 -- requires Goldline to disclose its actual price markups, in recorded calls before each transaction and follow a strict, factual script when discussing certain topics with consumers.

It also requires that the company not tell consumers that the government can confiscate gold bullion nor attempt to sell customers higher-priced coins once they have already paid for bullion.

The injunction also sets up a new phone line, staffed by non-commissioned employees, for refunds, liquidations, and other customer service.

Anthony Pacheco, a partner at the Los Angeles law firm Proskauer Rose, has begun his duties as court-appointed monitor to assure Goldline's compliance with the injunction.

 


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