The Santa Monica City Attorney’s Office filed a consumer protection lawsuit on 13th Feb, 2014 against Santa Monica-based precious metals dealer Seacoast Coin, Inc., doing business as Merit Financial and Merit Gold and Silver.
The gist of the lawsuit is-
The lawsuit accuses Merit of a massive, nationwide bait and switch scam. Merit advertises gold and silver bullion on TV, online and in print ads, at “1% over cost.” The complaint alleges that when consumers call in to buy bullion, Merit’s salespeople allegedly use false, deceptive and aggressive tactics to trick them into buying heavily marked-up so-called “collector” coins instead, including falsely telling consumers:
- that the coins are a better investment than bullion
- that the coins offer more privacy than bullion
- that the coins are not “reportable” on consumers’ taxes
- that the coins can’t be confiscated by the government, while bullion can be
The complaint further alleges that, in fact, the collector coins pushed by Merit have none of these advantages over gold or silver bullion, according to the lawsuit.