Coin Dealers going for the gold
|Published: Tuesday, 17 January 2012 18:25|
The 2012 Coinage Magazine Special Issue titled: ‘Gold & Today’s Global Economy’ had numerous excellent articles as usual, but one article in particular caught my eye by author and long time numismatist, Ed Reiter. The article was titled “Coin Dealers going for the gold” which was an expose on unscrupulous precious metal buyers. With permission of the author, Ed Reiter and Coinage Magazine, I have reprinted the concluding segment of the article.
Universal Coin & Bullion of Beaumont, Texas, is a major dealer in gold and silver coins and bullion. As a result, the company was well positioned to handle the rush of business that resulted several years ago from the boom in precious metals. But the company’s president, Mike Fuljenz, also has deep roots in traditional numismatics, especially rare Indian Head gold coins, so he’s keenly aware of the two-tiered nature of the business.
Fuljenz fully understands the economic realities that prompted many well-established dealers to move from collector coins to gold and silver. And the heightened competition – from this source, that is – doesn’t bother him at all. What does alarm him is the appearance of many new – and often unscrupulous – dealers buying bullion, especially gold, from an unwary public.
“The reality, of course, is that they pay their victims a fraction of what their gold is worth – often a very small fraction.”
Fuljenz has worked aggressively to expose the activities of gold ripoff artists through newspaper articles, TV and radio appearances and testimony before the Texas Legislature. His efforts have earned him a number of awards and also deep enmity from the predators he has been targeting. In pursuing this crusade, he has found a key ally in Jerry Jordan, editor of The Examiner, a weekly newspaper in Beaumont, whose investigative articles have won awards locally, regionally and nationally.
“Dealers get 99 percent of melt when they sell it to refineries – less a small refining fee, like $30. So if dealers are getting around 99 percent of melt, buying gold for 70 to 80 percent gives them a fair profit. But paying just 10 to 20 percent is outrageous.
“The worst offenders,” he added, “are these ‘cash-for-gold’ companies that advertise on TV, the mail-in buyers in general and the hotel buyers. And some gold parties aren’t much better.”
Fuljenz advises people thinking of selling their gold to learn all they can about prospective buyers. He cautions, however, that some “golden fleecers” falsify claims that they are members of reputable hobby organizations in order to cloak themselves in undeserved legitimacy and misrepresent themselves as experts.
“Call the organizations to verify their membership,” he counseled. “And remember that mere membership isn’t always a guarantee that someone is honest. In some organizations, you just have to pay the dues to be a member. You really want one that requires scrutiny.