Stacks Bowers Long Beach Expo Auction

HomeCrime and FraudMerit Gold & Silver Lawsuit: Third Bullion Firm Targeted Under California Consumer...

Merit Gold & Silver Lawsuit: Third Bullion Firm Targeted Under California Consumer Protection Law

From CoinWeek reported by Charles Morgan and Hubert Walker ………


On February 13, 2014, the Santa Monica City Attorney’s Office filed a consumer protection lawsuit against Santa Monica-based Seacoast Coin, Inc., which is better known as the precious metals dealer Merit Gold and Silver.

Merit is one of the most prominent precious metals dealers in the industry, advertising gold and silver investment instruments on national TV and radio outlets, as well as online. The company is headed by Peter M. Epstein and Michael J. Getlin.

The complaint, case number SC122066 filed with the Superior Court of the State of California for the County of Los Angeles, alleges that Merit engaged “in an aggressive, nationwide fraud scheme that has bilked consumers out of tens of millions of dollars.”

Attorneys for the city claim that Merit has, since at least September 26, 2009, operated a massive “bait and switch” scam, enticing customers–many of whom were senior citizens–to call to order gold and silver bullion at “1% over cost”, only to convince them to buy numismatic and semi-numismatic coins at a premium.

Peter Epstein and Mike Getlin are the two principles named in the suit.

Some of the alleged sales methods are detailed in the filing; they include falsely stating that numismatic and semi-numismatic coins:

• are a better investment than bullion

• offer more privacy than bullion

• are not “reportable” on consumers’ taxes

• can’t be confiscated by the government, while bullion can be.

In addition, the complaint alleges that Merit intentionally confuses consumers “as to which products they are buying, so that many still believe they are paying only one percent over Merit’s cost when in fact they are paying more.”

Santa Monica city attorneys are seeking injunctive relief, fines, and restitution of all monies wrongfully obtained from customers. The case falls under California’s Unfair Competition Law, which protects consumers from false advertising, fraud, and other unlawful business practices.

The suit bears some resemblance to the 2011 lawsuit Santa Monica brought against another bullion dealer, Goldine International Inc., which settled in February 2012 and refunded up to $4.5 million back to customers. The city then went after a second gold dealer in 2012, Superior Gold Group, which was ultimately placed in receivership. Attorney Alan Radinsky, who is involved with the present litigation and was also involved in the two prior cases, spoke with us by telephone about the charges his office is making against Merit.

Radinsky said, “The biggest problems with the precious metals industry is that consumers do not know they are being tricked. The main consumer allegation against Merit is that the 1% is merely the bait. The business model is based on switching consumers from bullion to marked up numismatic and semi-numismatic coins. Merit’s business model is to aggressively disparage bullion in order to get the customer to buy their other coins instead.”

CoinWeek contacted Merit and spoke with Executive Vice President Mike Getlin about the allegations. Getlin defended Merit, saying that Radinsky and city attorneys have misrepresented the facts and acknowledged that the investigation into Merit’s business practices have been ongoing for more than a year. “We were open with them, “said Getlin, “we substantiated our marketing practices and cooperated fully.”

In separate remarks prepared by Getlin in response to the lawsuit, Merit claims that city attorneys Gary Rhoades and Adam Radinsky are representing as facts “several statements that they know to be false and or misleading.”

In an undated internal memo, Merit disallows practices charged in the suit.

Getlin insists that Merit, contrary to claims cited in the complaint, does not and did not use dubious sales pitches (like the possibility of future gold seizures by the federal government) to sell its products. Getlin provided us with a company policy form that shows that Merit forbids the discussion of taxes, tax reporting, and the threat of government confiscation in order to sell its products and penalizes its sales advisors with forfeiture of commissions and possible termination for violating this policy. Members of their sales staff are required to sign and acknowledge this form.

Getlin also says that his firm did not use misleading tactics to upsell customers on non-bullion coins, pointing to an article Getlin wrote for the International Business Times, where he cautions precious metals buyers to be dubious of sales pitches that claim that government seizure of gold is likely or imminent. In the same piece, he argues that buying rare or semi-rare coins offers many advantages from “an investment standpoint.

Still, Getlin says that despite his personal feelings on the matter, Santa Monica’s charges are without merit, as the firm Merit has sold hundreds of millions of dollars in bullion at 1% over dealer cost.

CoinWeek will continue to follow the legal proceedings closely and provide updates when the situation warrants.


Charles Morgan and Hubert Walker
Charles Morgan and Hubert Walker
Charles Morgan and Hubert Walker have been contributing authors on CoinWeek since 2012. They also wrote the monthly "Market Whimsy" column and various feature articles for The Numismatist and the book 100 Greatest Modern World Coins (2020) for Whitman Publishing.

Related Articles


  1. Radinsky said, “The biggest problems with the precious metals industry is that consumers do not know they are being tricked.”

    Uh, that’s true of ANY industry. You can only get tricked if you don’t know you are being tricked. Sheesh!

  2. Upselling is a “bait and switch”? Since when? I also believe that a collectible coin often can be a better investment that bullion. The Attorney Office seems to have overreached its power. Frivilous lawsuit!

  3. They sold me 21 four piece gold eagle sets for $99999.90. They were worth $67000.

    They are sleazy salesmen with 1% over spot banner ad campaigns.

    I hope they get shut down and stop taking advantage of people’s ignorance.

  4. @Donald,

    Sure, there is greater profit potential with “old rare American gold coins”. I’m not sure if that is what this firm or other telemarketing firms offer. By definition old rare American gold coins” are rare- and hardly would be sold through these channels to unsophisticated buyers.

    I don’t know what Merit did or didn’t do to draw the ire of Santa Monica’s attorneys. That will come out in the wash and be settled in court.

  5. I’ve ordered gold and silver *bullion* from Merit many times and sure, they will take a moment to pitch you on higher markup *premium products*. Merit was never high pressure and it’s not against the law to make a profit. However, this smells like another “lawsuit for profit” where the government rushes in to protect consumers from themselves.

  6. They were the first place I called when looking into bullion. I did not let them pressure me (they tried and two years later still trying) to buy anything. I looked into them after the phone call since I didn’t get a warm fuzzy over the phone and found many problems with customer complaints. I did however find a reputable mint/dealer down in Texas and have zero complaints. The customer is ultimately responsible for doing business with someone that won’t burn you.

  7. Is what they do illegal? No. Is it crappy to prey on folks ignorance and fear? You betcha. It’s not just merit and goldlne, Most of the gold companies do it. The lears, rosilands, capitals, birchs, reagals, heritages, fortresses. Here is the deal. Bullion 2 to 6% above cost good and fair for the consumer.30-35% on numismatics, proofs or burnished, very, very bad for the consumer and fantastic lifestyle enhancer for gold salesman. Good rule of thumb. Check out A P M E X before you do anything. No faster way to get rid of an annoying gold telemarketer than mere mention of A P M E X. Caveat emptor, people. Caveat emptor. If you think you got a bad deal call them and complain and leave an honest review on ripoff report and the BBB. They really love it when you do that.

  8. I’ve dealt with Merit for years and haven’t had a problem. Yes, they pitch collectible coins. But, they pitch bullion too. I’ve never gotten any pressure tactics from Merit. No spam e-mails. The 1% claim seems to be accurate. I’m not a coin collector although I have some old US gold that I bought back in the 1970-80’s and have sat on them. Today they’re worth a lot more than bullion coins. When I bought them, they weren’t. Tomorrow, who knows? That’s the problem with collectibles in general. It’s an area novices should stay out of.

  9. If it sounds to good to be true, then it is. Do people really think a business can operate at a 1% markup? I don’t agree with bait and switch, and I do agree that Merit has mislead MANY of their customers, by not telling them the coins they were buying were not 1%, but if you as a consumer are ignorant enough to believe that you can buy ANYTHING for 1% then maybe you shouldn’t be buying gold.

  10. Caveat Emptor or Buyer Beware,

    The problem with this is the majority of potential clients are senile. How do I know, I work for one of them. They advertise on Fox and most senior citizens call in and get taken to the cleaners by slick guys who push them into 30% numis. Everyone of these companies I bet operates like this. Everyone working in the gold business knows it. There is no profit margin on bullion unless you are a big bulk dealer like Apmex or NWT Mint. I smell the government cracking down on all of us.

    Maybe I am having a Jerry Maguire moment.

  11. I was a victim of bait and switch with merit . They got about $700.00 extra out of me . Can I get that back ? Could someone tell me who to call about this or give me any information or update on this matter ?

  12. I’ve only had one dealing with them. All I can say is
    it went as smooth as butter. No pressure, salesman mention
    premium products but I said no and the conversation went
    back to bullion. If you don’t know what your buying then you need to do your research first. There is nothing wrong with asking what they may recommend but research it before purchasing. I mean really do you just test drive a new car and say I’ll take that one without looking at reviews(resale/trade-in value) on the web?

  13. I made 3 purchases from Merit. The first 2 went smooth and I bought what I wanted. On the 3rd purchase I had a new rep and he wouldn’t put my order in for what I wanted. I called back and asked for a new rep and they gave me the same guy. I was looking to buy Silver Eagles and he was pushing the year of the horse coins at a cost that was 25% more. I told him to give me what I wanted to buy or I’ll buy somewhere else. He gave in and put the order in for me but I decided to never buy from them again. If people stuck to what they want and not what’s being forced on them there wouldn’t be a problem. Their prices were always good.

  14. Lear Capital is guilty of the same, talking you into buying coins you did not intend to buy.
    Maybe it’s my fault for trusting them to look out for my good as well as theirs.

  15. I have made 3 purchases 1 through Goldline which was the worst and 2 through Merit where the were better but still felt like I was being nudged into something they were wanting me to buy. But Goldline was really bad, everything I wanted to buy was out of stock or on back order, can be seized by government, tracked, reported and will take a super long time to deliver. With Goldline, I have been treated better from a used car salesmen on a bad day.

  16. I placed a order with Merit on 6/24/13 and they did a hard sell
    on me to by silver Britannia snake roll. I found out later they
    ripped me off it was over priced the charged me $587 dollars for
    each roll of twenty coins. I hope to join the lawsuit to get my
    money back.Skumbags

  17. Has anyone had dealings with American Bullion? When I left my job I rolled my company sponsored 401K worth about $101,000 into a self directed IRA at the direction of American Bullion then purchased 22 Gold American Proofs and 22 Gold Canadian Maple Leafs. The sales rep omitted the 10% commission part and did not tell me that the 69 vs. 70 grading of the coins could significantly affect the price I would ultimately receive. I was repeatedly assured that this was a very conservative and safe investment that he would recommend to his own family! Now it is worth about 58K. Is there a class action lawsuit against American Bullion for misrepresentation? Biggest financial mistake of my life. Haven’t done a BBB complaint yet.

  18. They were honest with me. John Matias. they told me upfront it is was like a 20 or 30% commission fee for numismatics. The only area I question but I think they all overcharge on fractional coin purchases. Government is a much bigger criminal than these people ever dreamed of being. Federal and State.

    • are a better investment than bullion – TRUE

    • offer more privacy than bullion TRUE

    • are not “reportable” on consumers’ taxes Not Sure

    • can’t be confiscated by the government, while bullion can be. TRUE

  19. I was sold products in the exact way claimed by the article. They told me the coins were old and protected against government seizure, that it was a better investment than other us coins, that the government was planning on taking us gold as they did in the past. they assured me they were barely making a profit. Kept pushing the point that I didn’t have to report earnings on my taxes. as well as talking about it having better privacy. I purchased $10,000 dollars worth. however Merit will not tell you what they will purchase it back for. they will only say just mail it to us then when we receive it we will determine the price. The will not even give you an example of what they would give at the moment if they did have the gold in hand. When I pushed them to explain why I was hung up on.

  20. I made one purchase from Merit in July 2014, After visiting with their salesman, Charlie Chartoff at length, I purchased Gold and Silver for a precious metal IRA. I wish I could remember our conversation precisely, but I ended up paying a very large premium for the Horse Britannias, which apparently, the rest of the world considers essentially bullion. It was shortly after that purchase that I heard Merit was out of business, and I realized their BUY-BACK promise was null and void. I would be glad to be reimbursed !

  21. Yes ..I told them what I wanted..bullion.. well in their own charismatic way switched it all to coin..had me WIRE the money so I would physically have the precious metals with in 7-8 days..obviously didn’t happen and excuse after excuse I received my orders after 3-5 weeks. I was just happy to get anything because I thought my money was gone..they are slick and very deceiving sales reps..been working with APMEX ever since and they sell you what you want and deliver when promised. Do not have to wait days or weeks by the door to see if $50,000 ..$20,000 u wired to them is gone and they closed shop. NEVER EVER A WOULDN’T I DEAL WITH THEM AGAIN.

    • They took a long time to delivery my silver bullion as well – about 5 weeks. They initially said a week, but then after excuse after excuse it finally came. I really thought I was out $4K, but it finally came. After that, I never did business with them again.

  22. Hello;
    I have some coins that my husband bought I wanted to know if he was in the bait and switch scam. How do I find out and how do I get his money back?

  23. I have some coins we bought , I would like to know if we were in the bait and switch scam 2013 and 2014 .How do I find out? and how Do get all my money back? . we paid more than its worth today .

  24. I would like to know if I was part of the bait and switch. I purched from merit in 2012. How do I find out if I’m entitled to money back.

  25. I too purchased gold numismatic about 2014 they sold for 1% and turned out it was worth about half that i am also wondering if there is a way to get in on the law suit

      • Hi Ronald,

        I would contact the Santa Monica City Attorney’s Office since they were the ones pursuing the case. Chief Deputy City Attorney Adam Radinsky is the head of the City’s Consumer Protection Division; he can be reached at [email protected] or (310) 458-8327. If that number doesn’t work, then a more general phone number for the City Attorney’s Office is (310) 458-8336.

        I hope this helps.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Bullion Sharks Silver

AU Capital Management US gold Coins

NGCX Holders and Grading