NY congressman says Calif. gold-dealing firm overcharges for coins, preys on customers’ fears

Congressman: Calif. gold-dealing firm overcharges

NEW YORK — A New York congressman says a California gold-dealing company that advertises heavily on conservative talk shows is overcharging its customers and preying on their fears about inflation.

Democratic Rep. Anthony Weiner released a report Tuesday saying that Goldline International Inc. “rips off consumers, uses misleading and possibly illegal sales tactics, and deliberately manipulates public fears of an impending government takeover.”

Goldline President and CEO Mark Albarian denied the charges.

The company, headquartered in Santa Monica, Calif., sells bars and coins made of gold, silver and platinum to investors and collectors, its website says.

The congressman’s report based its findings on a study of 18 gold coins offered for sale on Goldline’s website. When it compared the sale price with the value of the gold if it were melted, it found an average markup of 90 percent. Coins sold as collector items were even higher, with a markup of 152 percent, Weiner’s report said.

Albarian defended gold as an investment and said his markup was 35 percent. He said melt value is only part of the value of a coin, which also has a collectible value that the company doesn’t set.

Weiner complained that Goldline had formed “an unholy alliance” with conservative commentators who suggest gold as “the only safe investment alternative for consumers who want to safeguard their livelihoods.”

He said Goldline sponsors talk shows during which the hosts praise investment in gold.

“When the show then cuts to commercial break, viewers are treated to an advertisement from Goldline,” Weiner’s report said.

Albarian said his company picks the shows it sponsors “not by their politics but by their passion for gold.”

He also said gold “has been a good investment over the last 10-plus years and clients who have bought gold have made money.”

The report also alleges that Goldline salespeople were misrepresenting themselves as investment advisers. Weiner spokesman Dave Arnold said that while it’s not illegal to charge a high price, sellers were making misleading claims about gold’s investment value. Albarian said that was false.

Weiner said he would propose a new law that would require Goldline and other dealers to disclose their fees and explain such terms as melt value and resale value. In addition, he asked the Securities Exchange Commission and the Federal Trade Commission to investigate.