Off time - no update Popular Online Coin Dealer Files Bankruptcy: How to Protect Yourself

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Popular Online Coin Dealer Files Bankruptcy: How to Protect Yourself

Online Coin Dealer

As you may recall, approximately a month ago we shared with our readers that Bullion Direct had suspended operations.  Typically, where’s there smoke, there’s fire, and not surprisingly, we were recently informed that they have filed for bankruptcy protection.  We’ve seen an alarming number of large online coin and bullion dealers recently go out of business, including Merit and Tulving, just to name a couple.  In Bullion Direct’s case, they allegedly failed to purchase gold and silver coins and bullion (at least in some cases) for individuals that opted for their storage service.  In other words, customers were under the impression that they were purchasing physical coins and bullion that were supposed to be stored in Bullion Direct’s vaults, only to find that the funds had been used for other purposes, such as the funding of their Nucleo Exchange program.  In this article, we’re going to share with our readers some steps that they can take to help reduce the risk of losing their investment when buying gold and silver coins and bullion.

Purchase Locally

There is a common perception that online coin and bullion dealers are much less expensive than local coin dealers and that this is the best way to purchase coins and bullion.  The reality is that this isn’t always the case.  You merely need to find a local coin dealer that has a business model and philosophy that is similar to most online coin dealers.  Do your due diligence and you’ll likely find a local coin dealer that is willing to provide you with pricing that is similar to online pricing; especially if you’re a bulk buyer of coins and bullion.  The most obvious benefit in dealing locally is that you’re able to obtain physical possession of your gold and silver at the time of your purchase.  In the event that your local coin dealer doesn’t have the inventory that you’re looking for, ask them if they would be willing to make a purchase through the wholesale market.  Most well established coin dealers are members of large coin dealer networks, which is more commonly referred to as the wholesale market.  Two of the largest and most respected networks in the nation are Certified Coin Exchange and CoinNet.  When you ask a coin dealer to place a special order for you in the wholesale market, expect to pay a deposit for the purchase.  This is a reasonable request and will ensure that the coin dealer is able to be made whole in the event that a customer attempts to back out from their obligation.  However, we suggest that you don’t pay a coin dealer the full amount for items in advance unless he or she can provide you with  documentation that the coins have been ordered and/or shipped.  This will help to reduce the risk of losing your investment.

Coin Dealer’s Reputation

As we mentioned in our opening paragraph, where’s there’s smoke, there’s oftentimes fire, so if you get wind of a coin dealer that has been experiencing issues, or that has experienced issues in the past, it’s likely best to choose another dealer; even if they are the low price leader.  With the power of the internet at our fingertips, it’s relatively easy to conduct an online search of a company’s reputation and/or their owners.  The Better Business Bureau is always a great place to start, but that’s not the only place.  There are many other independent sites that rate coin dealers and industry-related organizations that help to help coin dealers in check.  Word of mouth reputation is still very important, but more than ever, individuals are sharing their experiences with businesses online.  Be sure to check reviews on social media sites, such as Google+, Kudzu, Bing, Yelp!, Facebook, etc.  One negative comment shouldn’t necessarily cause too much concern, but we advise you to avoid a coin dealer that has a pattern of disappointed customers.  You should also conduct an online search of the principals of the company, as there’s always the possibility that the coin dealer with whom you’re considering doing business has had other ventures in the past that haven’t ended well.

Confirm Current Inventory

If for some reason you prefer to purchase coins and bullion online and/or don’t have any local coin dealers that are willing to provide you with reasonable pricing, it’s important to confirm with your online coin dealer that their inventory is live.  Be sure to also obtain an estimated shipping date.  If they duck your question, move on to the next coin dealer.  Also, if they’re unable to commit to a shipping date within three days of the completion of your order, it’s likely that they don’t have the inventory in stock or that they may be backlogged.  Inventory can change on a moment’s notice; especially if gold and silver prices experience a significant decline; so be sure to ask the coin representative these questions at the time of your order.

Accountability

If the online coin dealer with whom you’ve chosen to do business has failed to fulfill their obligations, it’s important that you immediately take action to ensure that your interests are protected.  You’ve heard the old adage that the “squeaky wheel gets the grease,” and it’s no different in the coin and bullion industry.  Report the matter to your local Better Business Bureau and any professional organizations that your online dealer may be associated with.  You may also want to notify the local authorities of potential fraud.  While many people that purchased from the likes of Tulving and Merit lost thousands of dollars, those individuals that were proactive and immediately reported their issues were oftentimes made whole; in the form of a refund or through actual delivery of the items.  In other words, don’t take the situation lying down and don’t assume that just because you’ve done business with a potentially questionable dealer that you won’t be made whole.

Summary

In conclusion, we’ve highlighted the recent bankruptcy of Bullion Direct and have also shared steps that you can take to minimize losses when purchasing coins and bullion.  While we believe that your best option is always to conduct business with a local coin dealer, for the reasons highlighted above as well as others, you should be reasonably safe assuming that you thoroughly research the online coin dealer you’re considering, as well as their principals.  When calling an online dealer, be sure that they have live inventory in stock.  If not, or if they fail to directly answer your question, move on to the next coin dealer.  Also be sure to confirm a shipping date so that you can track your order.  In the event that you’ve experienced issues and have given the online dealer a reasonable opportunity to resolve the issue, be proactive by reporting your matter to the BBB, industry-related organizations and possibly the local authorities to help protect your interests.  We hope that you liked today’s post and welcome you to follow us on Twitter and like us on Facebook to stay on top of all the latest developments in the coin and bullion industry.

Tony Davis
Tony Davis