What Is Commemorative Coin Fraud?

What are precious metals and commemorative coin frauds? Dallas, Texas based personal injury attorney Bruce Steckler explains the types of precious metal coin scams and when sales tactics can cross the line into actionable fraud. As Bruce discusses, in precious metals and commemorative coin scams, salespeople mislead consumers about the investment risk and value of the coins. The coins are sold for multiple times the value of the metals, often marked up as high as 300%. The scams often target senior citizens and retirees with deceptive sales pitches and scare tactics to convince them to use their retirement funds to purchase the coins. Some consumers have been defrauded out of millions. Bruce explains the potential claims for recovery and how victims can seek to recover their losses. 


  Bruce Steckler is a Dallas-based attorney at Steckler Wayne Cochran Cherry litigating a variety of commercial, securities, mass tort, products liability, consumer, personal injury, and first party insurance cases.

Additional Resources

The Commemorative Gold Coin Scam, Steckler Wayne Cochran Cherry

What Is Commemorative Coin Fraud? Brief Transcript

Interview with Coin Fraud Attorney Bruce Steckler


Joel Cohen (Host): Hello, and welcome to TalksOnLaw. I'm Joel Cohen. Today we're going to be discussing coin fraud and the line between aggressive sales and actual fraud. We're joined today remotely by an attorney based in Dallas, Texas, Bruce Steckler. Welcome to TalksOnLaw.

Bruce Steckler: Thanks for having me, Joel. I appreciate the opportunity.


What Is Coin Fraud?

Host: Bruce, we're talking about coin fraud. What's going on here?

Bruce Steckler: Well, typically what will happen is these coin companies will solicit elderly people where they're selling these coins as safe stable investments to protect your money and so the consumer will often go in wanting to buy bullion, for example. Which has a market value. Gold or silver, we can all look in the newspaper.

Host: It's a commodity. It's listed.

Bruce Steckler: Yeah it's listed and we can see online exactly what the market value is. But what happens is, the sales people say that's a really good investment, but what you need to be buying, which will be a much better investment for you are these commemorative coins. And they're often overcharged for these coins four to five times what their actual value is.

Host: So, instead of, I don't know, a five percent charge on bullion, and I'm making that up, there'd be a 400 or 500% charge on these coins?

Bruce Steckler: That's exactly right. Typically the markup would be 3-5% and you don't expect a four times, five time markup on what you're purchasing, which then makes it very hard to be an investment. In fact, I don't know that if we were to buy a coin today, whether we would realize the investment in our lifetime.

Host: That strikes me as a particularly cruel way of manipulating people into misusing their retirement or their savings, but aren't people free to spend their money how they want? Can't they buy commemorative plates or collectible dolls that may or may not retain their value?

Bruce Steckler: Absolutely, except when someone represents that these coins are an investment to you and makes certain representations about the character, quality, or value of those coins, and markets and sells them as an investment. Once you do tha,  it's no longer that “buyer beware.” People are relying on those representations. You have to remember that the whole industry of coins has a specialty and experts called “numismatis” and these are people who are licensed and specialized, have specialized training in coins and their value.

Host: This might be comparable to some type of art expert who could advise on the value of ancient art?

Bruce Steckler: That's exactly right. You and I can both like the painting, but we would never really know the true value and if you represent yourself as somebody who is selling the painting and telling them that it is a rare painting by a master artist, and you rely upon that, that's a little bit different than simply just buying something on the open market because they're not only representing themselves as having a special expertise, but then, if they then say it's some sort of investment that will appreciate over time, that can be actionable. 

Host: And we're not talking about twenty dollars here, ten dollars there. Some of these claims that you've been involved with are in the six figures, seven figures?

Bruce Steckler: Absolutely, and that's really the saddest part of this whole litigation that I've seen is the people that have been victimized are often elderly folks. They're lonely, they receive these phone calls, and they want to diversify their portfolio and leave something for their grandkids, and let their money grow, and instead, what's happened is these people have in essence turned, you know, a hundred dollars into $25 by buying a coin that's worth much less than what was represented to them.


Potential Claims for Recovery

Host: As two lawyers having a conversation, we should get into the causes of action. What are the types of legal cases that you can make on behalf of your clients?

Bruce Steckler: The first one would be potentially a breach of contract case, and obviously these all depend on the facts and circumstances that exist. A deceptive trade practices act, most states have deceptive trade practices act, which involve people deceiving other people in purchasing consumer goods. There's also specific statutes with respect to deception against senior citizens or disabled persons. Obviously misrepresentation and fraud, and then finally another claim would be unjust enrichment. So, there are a variety of causes of actions that can be brought against these companies if someone's been deceived or defrauded by a coin company.

Host: Bruce, you mentioned sometimes these are only discovered years later. How important is the statute of limitations in these cases?

Bruce Steckler: That's a difficult question. First of all, it's important to understand each state has their own statute of limitations for specific causes of action. So, it's important to get legal counsel to determine when you can file and what's required to file, but one of the things that we've been able to do successfully is to invoke the discovery rule, which means that you didn't even know you were defrauded, and not until you actually discovered that fraud could you actually bring a claim. And, oftentimes they hide that fraud through paperwork or documentation that they provide in their solicitations. So, knock on wood, we've been successful most of the time in overcoming statute limitations, but it is definitely a case-by-case basis.

Host: Before we let you go, can we talk about damages? What are you looking for in terms of what can be recovered for your clients?

Bruce Steckler: Well, I will tell you I'm a bit of a sucker, so I will help anybody out no matter what the value is. I don't have a value threshold. My goal is to make the clients whole, to put them back where they were when they started this process, including reimbursement of any expenses or legal fees involved in getting them to that point. It's not always the case, and under the law you're entitled, in some instances, to treble damages, etc., but my number one objective is to get them their money back as quickly as possible and make them whole.

Host: Bruce Steckler is an attorney in Dallas, Texas. Bruce, thank you so much for the time today.

Bruce Steckler: Thank you, I appreciate it.