Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC charges operators of Discount Gold Brokers with fraud, (Jun 3, 2016)

By Michael Menzhuber, J.D., LL.M.

The FTC has filed a complaint in the federal district court for the Central District of California, charging the operators of Discount Gold Brokers, a nationally advertised gold and silver marketing operation, with bilking consumers out of millions of dollars, the agency announced today (FTC v. DiscountMetalBrokers, Inc., FTC File No. 142 3107, Case No. 2:16-cv-2112).

According to the FTC’s complaint, DiscountMetalBrokers Inc. (d/b/a Discount Gold Brokers Inc. and North American Discount Gold.com), Donald Lee Dayer, Katherina Dayer, and Michael Scott Berman offered gold and silver "at discounted prices" with "zero commissions, fees, or expenses" and at "zero percent about dealer cost" but often failed to deliver the goods to purchasers.

The defendants, who stopped operating in 2014, allegedly ran ads in national media and touted gold and silver as a safe retirement investment on their website. The defendants required an up-front payment, via check or wire, and consumers were told to allow a minimum of 2-4 weeks for delivery. Consumers who called to ask about a delivery date were told that there orders would "ship soon," without providing a definite shipping date or reason for the delay. After paying thousands of dollars, hundreds of customers complained that they never received their orders.

The FTC charges the defendants with violating the FTC Act, as well as the FTC’s Mail, Internet or Telephone Order Merchandise Rule, which requires that sellers soliciting orders via mail, internet, or phone: (1) have a reasonable basis to expect that they can ship merchandise within any advertised time frame, or within 30 days if no specific time frame is promised; and (2) obtain a buyer’s consent, or cancel the order and promptly issue a refund, if the promised shipping time cannot be met.

The FTC seeks to recover money from the defendants to return to their customers, many of whom allegedly lost thousands of dollars.

Companies: DiscountMetalBrokers Inc.; North American Discount Gold.com

News: Advertising ConsumerProtection FederalTradeCommissionNews