As a precious metal dealer, you have the important responsibility to protect your customers’ interests by adhering to all applicable laws and regulations. This includes meeting all registration and licensing requirements, complying with record-keeping and reporting obligations, and conducting thorough Know Your Customer (KYC) checks. By implementing best practices for compliance, you can safeguard your reputation and maintain the integrity of the industry.
Consumer protection laws and regulations exist to prevent fraudulent practices in the precious metals industry. These laws and regulations also aim to ensure transparency, fairness, and safeguard the interest of consumers. Precious metal dealers and brokers should adhere to these consumer protection regulations, including providing accurate information about local Arlington gold buying and selling market, refraining from engaging in deceptive practices, and displaying clear policies on their websites.
In the past decade, several shady metals dealers have been the target of far-reaching lawsuits by state and federal regulators after they allegedly bilked aging or near-retirement investors. Court filings and interviews with formerly employed employees offer a glimpse into the high-pressure sales culture in some metals dealers, where salespeople play on aging investors’ financial fears to push heavily marked-up gold and silver investments.
The alleged fraud in these cases is complicated and often involves a network of companies. One example is Safeguard Metals, which is the subject of a 2020 lawsuit by the Commodity Futures Trading Commission (CFTC) and 30 states that accuse it of charging undisclosed markups of up to 313 percent, costing more than 1,300 investors $185 million. The company pleaded guilty to violating multiple securities laws and facilitating a multi-million-dollar Ponzi scheme in its plea agreement.
Despite the risks, many people continue to invest in gold and other precious metals. The yellow metal’s popularity has soared in recent years, as many investors fear a stock market collapse and an inflationary future. But the decision to invest in precious metals is a personal and independent one. Investors should take the time to research and understand the investment they’re making.
The good news is that the vast majority of Arlington gold dealers are honest and reputable. However, the shady ones are a reminder that there is no such thing as a risk-free investment, and skepticism should be the default setting when investing in any type of investment.
To protect your customers, consider partnering with a trusted compliance expert who can help you develop and implement an effective compliance program that addresses all regulatory requirements. Having a team of legal and compliance professionals on your side can help you mitigate potential risk, protect your reputation, and achieve the highest level of compliance in the industry.