Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Telemarketers barred from selling precious metals under FTC settlement, (Aug 22, 2013)
Organizations Mentioned:Sterling Precious Metals LLC
By Tobias J. Gillett, J.D., LL.M.
A telemarketing operation has settled FTC charges that it sold precious metals investments to consumers without adequately revealing that the investments were “sold as a leveraged or financed transaction,” and while misleading them regarding the terms and conditions of the investments (FTC v. Sterling Precious Metals, LLC, FTC File Nos. 1223027 and X120027, Case No. 12-cv-80597-KAM).
According to the FTC’s complaint, telemarketers working for Sterling Precious Metals LLC would inform consumers that they could earn substantial profits on investments in precious metals, with little risk of loss. However, the telemarketers would allegedly fail to tell the consumers that their investments would be used to pay for only about 20% of the transaction, with the rest financed through a loan with interest. The telemarketers would also allegedly fail to disclose fees, commissions, and other terms and conditions of the investment transactions. Most investors would lose money on their investments, according to the FTC.
Under the terms of the consent decree, Sterling, as well as its principals Matthew Meyer and Francis Ryan Zofay, will be permanently barred from advertising or selling precious metals. The decree also prohibits them from misrepresenting material facts about any goods or services. They must record all telemarketing calls they make for a period of seven years after entry of the order, must properly dispose of all customer information obtained during their telemarketing activities, and must provide sufficient consumer information to the FTC for it to administer consumer redress.
In addition, the settlement imposes a judgment of $4,735,995.27 jointly and severally on Meyer and Zofay, which will be partially suspended due to their inability to pay. Meyer must also surrender his leased 2013 Bentley Continental and 2012 Land Rover. The full amount of the judgment will immediately come due if the defendants are found to have misrepresented their financial condition. The order also provides for compliance monitoring and reporting.
Companies: Sterling Precious Metals LLC
News: ConsumerProtection FederalTradeCommissionNews