The Pitch: As Safe as Keeping Metal in Your Mattress?
As part of a Federal Security Investment Task Force, Brown has been involved in many precious metal scam investigations. She has uncovered deceptive sales scripts that bill precious metals as a safe-haven investment, even calling it "as safe as keeping metal in your mattress." "They cold call consumers and give very strong sales pitches, saying precious metals will rise significantly, doubling or tripling in as little as 30 days, and that consumers must send in money immediately so they don't lose out on the opportunity," Brown said. Studies have shown the number of companies offering consumers the chance to buy or invest in precious metals has increased, according to a fraud alert released by the U.S. Commodity Futures Trading Commission earlier this year. "However, many of these companies do not actually purchase or store any metal for their customers," the report said.
How Precious Metal Scams Operate
One such fraudulent company was run by fugitive Luis Ferreira. A two-time telemarketing fraudster, Ferreira was fresh out of federal prison and barred from fundraising for three years. In 2008, he used his mother's name to incorporate Spyker Consulting, a precious metals telemarketing firm based in south Florida. (See: How Luis Ferreira Became a Fugitive.) Without direct access to the precious metals market, Spyker supposedly contracted a Londo...