Seventy-two-year-old Patricia Thomas recently sued the National Collector's Mint in federal court in Houston, claiming that one of its sales representatives, under the guise of "checking in" with her, persuaded her into purchasing $1.3 million in gold and silver coins—at a cost more than double what they were worth. Thomas alleged violations of federal telecommunications law that prohibits telemarketers from misrepresenting the risk and profitability of investments and Texas deceptive trade practices law for allegedly claiming the coins would increase in value.
The Houston Chronicle’s article, “Elderly woman says coin seller duped her into $1.3 million in purchases” reports that the lawyer representing National Collector's Mint claims no one was deceived and that Thomas could return the coins for a refund.
Some unscrupulous sales representatives will target older investors, preying on their anxiety of whether they've saved enough to retire and promising them above average earnings by investing with them.
Most of the investment fraud cases brought by the Texas State Securities Board against investment firms and advisors last year involved elderly investors. In these cases, sellers often describe the complicated investment vehicles as great opportunities to make extraordinary returns and claim that they're "risk free," "safe and secure" and "guaranteed.”
National Collector's Mint makes and sells coins and collectibles, advertising on television, magazines, its website, and through telemarketing, according to the Federal Trade Commission. The mint settled the action, without admitting any wrongdoing.
Thomas suffers from rheumatoid arthritis and requires full time care. She sees her children infrequently and anticipated the calls from Randy T. Perry, the mint's sales representative, according to court documents. She came to believe that Perry, who was also named in the suit, was a close friend whom she could trust, the lawsuit alleged. As a result, she made significant purchases, including many coins that cost more than $30,000 each.
Thomas is an unsophisticated investor and had no clue that rare coins are bought and sold in coin marketplaces and that information on value is readily available, according to court filings.
"They lured her in with some low-priced coins," the lawsuit said, "gained her trust, then pushed very expensive coins on her, knowing full well she had no idea about the true value of the coins."
Reference: Houston Chronicle (February 15, 2018) “Elderly woman says coin seller duped her into $1.3 million in purchases”