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Consumer Alert: The $80/oz Silver Sales Pitch

By CoinWeek Staff Reports …..
A reader sent us an email last week, telling us about something his wife received in the mail.

It was an offer for something called the “Unclaimed Silver Program” from the United States Commemorative Gallery. The advertisement, which addressed her personally, stated that the company had “unclaimed” bars of silver in its vault and that she was one of those entitled to claim “what few are left”. It then gave her a deadline of 72 hours to call their toll-free hotline or mail in the attached form to claim up to 17 bars.

The form laid out her options. One bar of silver could be claimed for “only $19.95”. Five bars could be claimed for “only $99.75”. Ten could be had for $199.50, and 15 unclaimed silver bars were hers for $299.25. If she chose to claim 10 bars, she would also receive an additional bar free. If she claimed 15, she would get two more free. Shipping and handling was $5.85 no matter how many bars of silver were being shipped.

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Commemorative Coin Gallery claims that silver hit $106.48 in 1980. Source: USCG Mailer.

These are strange numbers, but there were stranger ones inside. For example, the company said that the price of silver peaked at $106.48 some time in 1980 (the Hunt Brothers and their corner on the market aren’t mentioned).

Then there is the size of the bars themselves. Each bar of silver in the United States Commemorative Gallery’s “Unclaimed Silver Program” consists of one-quarter of an ounce of silver. Newsprint photographs of 999.9 fine silver bars are included in the mailer but it based on the size of the bars in the picture, it is highly unlikely that these bars are representative of the quarter of an ounce that the silver bars actually being offered for sale.

Numerous reasons are given as to why someone should buy silver in the current market. Silver is inherently valuable while the U.S. dollar–paper money, fiat money–isn’t. Silver is in high demand and the earth may soon run out… but somehow silver prices are low (cheaper than gold!). Besides, you should diversify your “numismatic portfolio”. No reason is given as to why it’s a good time to buy silver for more than 415% over current silver spot price.

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The recipient of this silver solicitation was urged to act quickly, lest their unclaimed silver be offered to other eager customers. Source: USCG Mailer

And the whole thing is signed by one George C. Radford, Vault Operations Manager. A disclaimer to the left of his signature states that the company is “not affiliated with the United States Government or any government entity”.

Our reader didn’t bite, nor did his wife.

If he had, however, our reader may have found himself on the mailing list of one Suarez Corporation Industries, a private direct marketing company based out of the Canton, Ohio area. Suarez Industries would then send solicitations for its many other lines of business to respondents. Over time, this has included jewelry, sporting goods and “general merchandise”.

Suarez also makes money by selling its customer mailing list to other direct marketers–which means by responding to the unclaimed silver ad, you risked no longer having control over your personal information as it is circulated among many different companies for an indefinite amount of time.

The company has faced scrutiny for its operations before.

In the past, it has made use of mailers that promised a free America the Beautiful quarter, in exchange for an amount of postage totaling $1.47 for some kind of special shipping package. Add to that the cost of mailing your reply in the first place, and suddenly your “free” quarter costs almost $2.

Suarez Corporation Industries defended its quarter offer by claiming it was what the retail industry calls a “loss leader”. A loss leader is sold for less than it is worth in order to generate sales leads or entice customers to buy something else that they may not have otherwise, with the tactic as a whole turning a profit in the long run, if not sooner.

2015 Bombay Hook National Wildlife Refuge America the Beautiful Quarter reverseA quarter that costs the customer almost $2 does not seem to fit this definition.

However, the solicitation that our reader received earlier this month is apparently not the first time Suarez has tried to entice customers with silver. In 2011, the company was offering five silver ingots for $9.95 plus shipping and handling. Consumers who contacted Suarez about this ad–or indeed purchased the silver–learned that each wafer-thin “ingot” consisted of only one gram of silver. The spot price of silver at the time of this writing is $15.27 per ounce. There are approximately 31.1 grams in one ounce. Consequently, one gram of silver today is worth about $0.49. Multiply that by five, and you get $2.45.

The spot price of silver was much higher when the five-ingot offer was sent originally.

In addition, it may be important to note that Benjamin D. “Ben” Suarez, the founder and president of Suarez Corporation Industries, was convicted of one count of obstruction of justice by witness tampering on June 26, 2014 in regards to a campaign finance investigation. He began serving a 15-month sentence at a minimum-security federal facility in Glenville, West Virginia on January 23 of this year.

The former Suarez Corporation Industries Chief Financial Officer (and Ben Suarez’s son-in-law), Michael Giorgio, plead guilty to seven counts and is currently serving a 27-month sentence in federal prison.

And according to LexisNexis®, no one named George C. Radford is listed in the company directory.

CoinWeek reached out to the United States Commemorative Gallery with a number of questions such as Who is George C. Radford? When did silver hit “$106.48” an ounce? Et cetera. No response to our inquiries was received.

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Unclaimed Silver Transfer Form. Source: USCG

UPDATE, 9-25-15: The original version of this story listed the number of grams in one ounce as “approximately 28.35”. One avoirdupois ounce does indeed consist of almost 28.35 grams, whereas the silver ingots in question are measured in troy ounces, which consist of slightly over 31.1 grams. Thanks to our readers for the catch. We apologize for the confusion.

Sources

http://www.sfgate.com/business/article/Pay-1-48-for-a-free-quarter-2637013.php

http://www.consumeraffairs.com/misc/united-states-commemorative-gallery.html

http://www.yelp.com/biz/us-commemorative-gallery-canton

http://www.bbb.org/canton/business-reviews/internet-marketing-services/suarez-corporation-industries-in-canton-oh-55/

http://www.cleveland.com/court-justice/index.ssf/2014/06/defense_for_suarez_corporation.html

http://www.cantonrep.com/article/20140130/NEWS/140139898

http://www.cleveland.com/court-justice/index.ssf/2014/11/ben_suarez_says_he_was_falsely.html

http://www.cantonrep.com/article/20150123/NEWS/150129609

LexisNexis®; Searched 9-18-15

CoinWeek
CoinWeek
Coinweek is the top independent online media source for rare coin and currency news, with analysis and information contributed by leading experts across the numismatic spectrum.

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