I made an IRA rollover of $60,000 to Goldline Interntl, Inc on May 14, 2013. According to my June 2013 statement this IRA is only worth $38, 676.86.
I made an IRA rollover of $60,000 on May 14, 2013. I expected my IRA to still be worth approximately $60,000 minus some minimal maintenance fees ($60) and transaction fees ($40) as explained by Mr. **************** at Goldline. When I received my June 2013 Statement of Account from Goldstar Trust Company (the company that stores the coins purchased through Goldline) I found that the value of my $60,000 IRA was reduced to only $38, 676.86. This is a loss of $21,323.14 or 35.4% of my original IRA. This loss is not due to reductions in the price of gold or silver but due to the greedy business practices of Goldline International Inc. I am requesting return of my entire $60,000 IRA from Goldline.
I have asked Goldline for a refund by phone call, and later through a letter from an attorney at Parker Stanbury LLP sent on August 27, 2013. In a letter dated September 9, 2013 from ************ at Goldline, Goldline refused to make any refund of my IRA.
Goldline International Inc. uses deceptive marketing practices to profit from IRA rollover investments. They encourage investors to purchase gold and silver coins with huge markups of the price, as much as 50.2% markup in my case. Goldline International's own Account Agreement states that "If the spread for a coin is 28% and Goldline's ask/selling price is $500 for the coin, then Goldline's bid/buyback price is $360. In this example, the bid price of the coin would have to appreciate $140 (=$500-$360), or 38.88%, before breaking even (excluding liquidation fees and other costs)." A 38.88% appreciation of a coin is an unreasonable expectation in a short period of time.
As part of this rollover, Goldline purchased 420 Australian WW2 commerative coins costing me $10,191.75 with a market value of only $5,075.20 for a net loss of $5,116.55 or a 50.2% loss in value (see Table 1 below). How can this be fair?
I have also contacted the City Attorney's Office of Santa Monica California, the home of Goldline International to request a refund. According to a press release on February 22, 2012, the Santa Monica City Attorney's Office obtained a judgment and injunction against Goldline International Inc. The injunction "requires Goldline to change its unfair sales, practices and provide accurate price information to consumers. It also requires Goldline to refund up to $4.5 million to former customers and to pay $800,000 into a fund for future claims. The court has appointed a Monitor to ensure Goldline's compliance." A PDF Copy of the Final Judgement can be Viewed Here I have contacted the Monitors appointed by the City Attorney's Office, ************** and ***************, but so far have not received any refund or expectation of a refund.
Can the California BBB help me recover my IRA from Goldline International, Inc?
Table 1, Summary of June 2013 Statement Of Account from GoldStar Trust Company
Item No. Description Quantity Cost Basis Market Value Loss in Value ($) Loss in Value (%)
****** Canadian $5 Devils Brigade 42 $21,420.00 $12,859.56 $8,560.44 39.96%
****** American Eagle, XXXX X oz. 5 $8,506.75 $6,226.50 $2,280.25 26.81%
****** American Eagle, XXXX X oz. 4 $6,805.40 $4,981.20 $1,824.20 26.81%
****** American Eagle, XXXX X oz. 1 $1,701.35 $1,245.30 $456.05 26.81%
****** Bullion Bar, CRSU, .9995+ 1 oz. 4 $3,509.60 $2,639.60 $870.00 24.79%
***** Canadian Maple Leaf 1 oz. 4 $7,324.40 $5,385.66 $1,938.74 26.47%
****** American Eagle, XXXX X oz. 1 $32.66 $20.89 $11.77 36.04%
****** American Eagle, XXXX X oz. 9 $293.94 $188.01 $105.93 36.04%
****** Bullion Round, Australian WW2 1/2 oz. 520 $10,191.75 $5,075.20 $5,116.55 50.20%
Totals $59,785.85 $38,621.92 $21,163.93 35.40%
I am requesting a total refund of my entire $60,000 IRA from Goldline International, Inc.
***SEE SCANNED DOCS***
(The consumer indicated he/she DID NOT accept the response from the business.)
In the first sentence of the next to last paragraph on page 2 of the letter from Goldline dated January 20, 2014 they incorrectly stated "Mr. ****'s chart is misleading because it does not reflect the value of the products on the date of purchase (May 14, 2013)." My chart contains the exact values that Goldline charged me on the date of purchase of May 14, 2013. These values are shown on a Trade Confirmation from Goldline with a Trade Date of May 14, 2013.
I purchased the exact coins that were recommended to me by Goldline on May 14, 2013. The closing price for gold on May 14, 2013 was $1,425.70 per ounce and dropped to $1,240.90 on July 30, 2013 which is a 13% reduction in gold price. Other precious metals performed similarly. This 13% reduction in gold price does not account for the 36% reduction in value of my IRA when purchased on May 14, 2013 to the value on the GoldStar statement date of June 30, 2013. The additional 23% reduction in my IRA is due to the huge markup of the price of coins by Goldline. Goldline unfairly marks up their coins for sell to increase their profits.
I am still requesting a full refund from Goldline of my $60,000 IRA.
Final Business Response
Thank you for the opportunity to provide additional information regarding Mr. ****'s purchase. As Goldline's written trade confirmation reflects, Mr. **** purchased a mix of products that, prior to his discount, had either a 14.94% to 38.88% break even. However, Mr. **** received an additional (20) ½ oz. silver US-Australian WWII coins and (2) ¼ oz. gold Devils Brigade coins at no charge which reduced the break even to 34% for the ½ oz. silver US-Australian WWII coins 32% on the ¼ oz. gold Devils Brigade coins.
In addition, as Mr. **** has been advised multiple times, the 6/30/13 valuation provided by GoldStar reflects an average wholesale price as determined by GoldStar and that Goldline's bid prices often differ from these prices. Indeed, Goldline's bid/buyback value on 6/30/13 was more than $3,000 higher than GoldStar's valuation.
Mr. **** was advised verbally and in writing: (1) the quantity and products being purchased, (2) the per unit selling price of the products purchased, (3) the per unit buy-back price as of the date of purchase, and (4) percentage the products buy-back price must increase to break even. This information mirrors the information that Mr. **** was provided and agreed to during the tape recorded confirmation of his purchase.
Mr. **** states that Goldline unfairly marks up their coins to increase their profits. This is untrue. Goldline's mark-ups are consistent with, and often lower than, prices charged by other competitors. More significantly, California law is clear that retailers may charge mark-ups far in excess of Goldline's 34% mark-up. See, e.g., Wayne v. Staples, Inc., 135 Cal.App.3d **** XXX (XXXX) (holding a 100% mark-up 'is wholly within the range of commonly accepted notions of fair profitability. Cases of price unconscionability generally involve much greater price-value disparities.")
Although we regret that Mr. **** is unhappy with this purchase, Mr. **** received full disclosure regarding the pricing of his coins and is not eligible to cancel his purchase for a full refund.
If we can provide you with additional information to the BBB, please do not hesitate to contact me.
GOLDLINE INTERNATIONAL, LLC
Director of Client Relations
Tel (XXX) XXX-XXXX
Fax (XXX) XXX-XXXX