FORT LAUDERDALE (CN) - The Federal Trade Commission claims in court that a man who runs three precious metals companies suckers elderly customers out of their retirement savings with "high-pressure telephone sales tactics" and "inaccurate and incomplete description of their sales offer."
The FTC sued Anthony J. Columbo and his companies, Premier Precious Metals, Rushmore Consulting Group, and Ppm Credit, all of them based in Deerfield Beach. "The majority of consumers who purchase precious metals from defendants lose money," the FTC says in its federal complaint. "Consumers' equity in their precious metals investments is drained by the fees and commissions that are assessed at the inception of their transactions and by the constant accumulation of service fees and interest charges on the leverage portion of their accounts. These fees, commissions, and interest charges negatively affect consumers' ability to break even or profit on the precious metals investments."
The FTC claims that since 2010 Columbo and his companies "collectively operate an investment scheme in which telemarketers promise consumers, many of whom are senior citizens and retirees, that consumers can earn large profits quickly and safely with precious metals."
The complaint continues: "Defendants' telemarketers make outbound calls to solicit consumers as well as take inbound consumer calls in response to website advertising. During these calls, defendants use high-pressure telephone sales tactics to convince consumers to purchase precious metals and, in the process, provide consumers with an inaccurate and incomplete description of their sales offer.
"Defendants tell consumers that the investments they are offering are lucrative. Defendants represent that precious metals prices are going to rise and that consumers who invest in precious metals are likely to earn substantial profits in a short period of time. Defendants advise consumers that they are experienced brokers and that they predict metals will reach a particular price within a short time period. In fact, precious metals prices are volatile and defendants cannot reasonably predict precious metals prices.
"Defendants assure consumers, many of whom are investing their retirement savings, that precious metals have a low or minimal risk of loss. Defendants state that precious metals have been an investor's 'safe haven' for thousands of years. Defendants also advise consumers that defendants do not deal with 'risky' options or futures contracts.
"After leading consumers to believe that the offered precious metals investments are lucrative and safe, defendants fail to clearly disclose the total costs of the investments. Defendants often fail to clearly inform consumers that the precious metals are sold in a leveraged or financed transaction, meaning that a consumer's investment is used to pay for about 25 percent of the precious metals purchased, with the remaining 75 percent financed to the consumer through a loan with interest. Thus, some consumers are unaware that the money that they agreed to invest with the defendants will only pay a fraction of the total cost of the precious metals purchased. Even when defendants mention to consumers that the precious metals transactions are leveraged, they misstate or do not clearly explain the terms, conditions, and costs of the leveraged transaction, such as the fact that consumers must pay monthly interest charges on the leveraged portion of the transaction.
The FTC seeks an injunction, freezing of assets, appointment of a receiver and "rescission or reformation of contracts, restitution, the refund of monies paid, and the disgorgement of ill-gotten monies."
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