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FraudNews
06-16-2010, 09:43 AM
Thousands of consumers fall victim each year to gemstone investment schemes. It is not uncommon for individual victims of gemstone investment scams to lose more than $100,000.00 to a single telemarketing scam. Slick telemarketers try to convince you that the dollar is weak and that gemstones, rare coins, or precious metals are a solid investment that will quickly increase in value. Don't be fooled. Few consumers ever profit from investing in gemstones or other commodities, simply because consumers typically do not know enough information to make wise investment decisions.

Before investing in gemstones, do your homework. Independently research the gemstone market. </STRONG>

Instinctively disbelieve everything the telemarketer tells you on the phone. Go to your local library. Read the Wall Street Journal. Talk to a respected jeweler in your area. Ask questions. Make sure you understand gemstone quality and grading. Learn the realistic market values. Research profit history in gemstone investing. An uninformed investor will likely lose money investing in gemstones.

Deal with a reputable company.

Call the consumer protection agency or the Attorney General's Office in the company's home state. Find out when the company first became incorporated. Find out the company's history of consumer complaints. Ask the company for written information before making any purchases. Be very wary of companies that contact you offering to sell gemstones.

Be skeptical of the seller's certificate guaranteeing the value of the gemstones.

Because value and grading are subjective, different people may have very different opinions about the value of a particular gemstone. Value can also be based on many different things (retail price, wholesale price, replacement cost, cash liquidation value, etc.). Independently hire someone you trust to perform an appraisal of any gemstones you intend to purchase. Make sure that you know the cash liquidation value, as this is the price you will probably receive if you sell the gemstones. This price might be much less than you anticipated.

Do not be pressured into making a bad decision.

If the telemarketing salesperson uses high pressure tactics to encourage you to buy now ( we only have a few good items left or the offer expires tomorrow ), do not do business with this company. Ask the seller to put all the terms of the sale in writing before you buy the gemstones, including return and resale policies.

Reselling your gemstones.

Remember, gemstones are not a liquid investment. This means that they usually cannot be resold quickly at a profit. If you need to sell your gemstones quickly, you could lose money on your investment. Also, although you will buy your gemstones at retail prices, you will probably sell them at wholesale prices. For that reason, most investors plan to own their gemstones for at least ten years. Even then, it may be very difficult to find a buyer. Beware: telemarketing scammers (using a new name) often target previous gemstone buyers for revictimization using claims that they can help sell your gemstones.

If you become defrauded.

File a complaint with the Attorney General's Office in the state where the company is located. That office may be able to help you and other victims of the scheme.

Source (http://myfloridalegal.com/pages.nsf/main/a417044c31d00ebe85256cc900582589!OpenDocument)