For the third time in the last few weeks, the Commodity Futures Trading Commission has taken action against precious metal investors. American Precious Metals, LLC is the latest company to be shut down in this review of precious metal investments. Businesses have been guaranteeing fraudulent investments in gold, silver and other precious metals.
What the suit against American Precious Metals LLC is about
The American Precious Metals LLC company is situated in Florida. It is in Lake Worth, Fla., to be exact. Customers were pressured by telemarketers into purchasing gold, silver, platinum and palladium investments being sold. The consumer could get financing from the company, according to the salespeople, and would get the physical metals stored as well. A huge down payment was required though. In exchange, the company promised several hundred percent returns on the customer’s investment. The business gave people short-term loans for investment in very special metals. Still, these metals didn’t really exist. The company also never registered with the Federal Trade Commission or CFTC as an investment business. Regulation on precious metal was not followed by the company. It also violated the Telemarketing and consumer Fraud and Abuse Prevention Act. Now the business does not have access to its assets. They were all frozen.
Increase in precious metal prices
Precious metal investment scams have become more prevalent recently. This is because there has been a rise in the precious metals price tags. There has been an increase from $1,200 to over $1,500 in the per-ounce price of gold in just the last year. This isn’t just for gold. Other precious metals have also been increasing. This is partially because precious metals are often viewed as a “safe haven” when worldwide currencies are weakening. Some industry watchers have warned that gold and precious metals are getting close to bubble status, with prices that have expanded beyond their “real” value.
Invest carefully
Investing could be an activity fraught with dangers. You are able to get your own precious metals and store them. No matter how you choose to invest, always work with businesses that have been vetted by the Better Business Bureau. Any business that can’t be verified with the FTC or CFTC should not be invested in.
Citations
FTC
ftc.gov/os/caselist/1023212/110517americanpreciousmetalscmpt.pdf
Futures Mag
futuresmag.com/News/2011/5/Pages/CFTC-charges-Fla-firm-with-precious-metals-fraud.aspx
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