NCL to Congress: get tough on gold ‘investments’ with H.R. 6149 – National Consumers League

September 23, 2010

Washington, DC—The National Consumers League, the nation’s oldest nonprofit consumer organization, has offered its support for H.R. 6149, the “Coin and Precious Metal Disclosure Act,” which the consumer watchdog says would do much to give consumers an accurate picture of the risks associated with buying gold and precious coins. Consumers may consider gold and precious coins to be an effective investment hedge against inflation. However, recent investigations by federal, state and local enforcement agencies suggest that some gold dealers may be leveraging recessionary fears to steer consumers into buying gold and precious coins at inflated prices.

In a letter to Rep. Bobby L. Rush (D-Ill.), Chairman of the U.S. House of Representatives Subcommittee on Commerce, Trade, and Consumer Protection for the Committee on Energy and Commerce, NCL Executive Director Sally Greenberg conveyed the nonprofit organization’s concerns about the proliferation of gold coins being marketed to consumers as investments, particularly in the midst of a difficult economy. The subcommittee is holding a hearing today to discuss the proposed legislation and potentially deceptive practices in the gold and precious coins marketplace.

“Purchasing gold may be a useful way for consumers to diversify their investment portfolios. However, we are disturbed by reports of gold dealers pressuring customers to purchase collectible coins at prices inflated far beyond market value,” wrote Greenberg. “Further, it concerns us that salespeople working for a prominent gold dealer were found by the Securities Division of the Secretary of State of Missouri to be offering financial advice to consumers without being licensed as investment advisors.”

H.R. 6149 will address these concerns by requiring disclosure of relevant fees and the purchase price, melt value, and resale value of coins and metal bullion. NCL believes that these disclosures will help consumers more effectively evaluate gold investment opportunities and applauds Congressman Weiner for introducing this bill and convening a hearing on the matter.

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About the National Consumers League

Founded in 1899, the National Consumers League is America’s pioneer consumer organization. Its mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. NCL is a private, nonprofit membership organization. For more information, visit www.nclnet.org.