News, Regulation

FTC bans Sterling Precious Metals from selling precious metals

150px-US-FederalTradeCommission-Seal.svgPrecious metal telemarketers behind an allegedly fraudulent investment scheme used to extort $5 million from elderly consumers were recently banned from selling precious metals under a settlement with the Federal Trade Commission.

The FTC alleged that Sterling Precious Metals and two other defendants falsely told consumers they could profit by investing in precious metals with little risk, failing to mention that the consumers would likely have to pay extra later or risk losing their investment.

“During these calls, defendants use high-pressure telephone sales tactics to convince consumers to purchase precious metals and, in the process, provide consumers with an inaccurate and incomplete description of their sales offer,” the FTC complaint said, according to Law 360.

The FTC said the investments were sold as leveraged transactions in which the consumer investment would pay for approximately 20 percent of the precious metals, while the remaining 80 percent would be financed through a loan with interest.

Under the FTC settlement order, the defendants are prohibited from misrepresenting any products or services and from selling or benefiting from consumers’ personal information. The order also requires the defendants to record all telemarketing calls for seven years.

Matthew Meyer and Francis Ryan Zofay, the two other defendants, are required to pay more than $4.7 million under the settlement order, though the judgment will be partially suspended based on their ability to pay and the surrender of Meyer’s leased cars.

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