WARNING: Don't Sign Away Your Legal Rights When Buying Gold or Silver Coins

The Fine Print in Coin Dealer Contracts Protect the Dealer, Not You

Buying gold or silver coins should be simple. You select your coins, agree on a price, pay, and receive a receipt.

So why do some coin dealers require lengthy contracts filled with legal restrictions? Because those contracts take away your rights before you even discover that you may have been overcharged or misled. Ultimately, they are a roadblock for consumers like you.

16 Contract Provisions Every Coin Buyer Should Watch For

Here are some of the most troubling provisions found in precious-metals dealer agreements:

  • Shortened statutes of limitations. Some contracts attempt to reduce the time to bring a legal claim to just one year, even when the law ordinarily allows longer.
  • Mandatory arbitration. Instead of suing in court, customers must resolve disputes privately, sometimes through expensive proceedings.
  • Arbitration costs. Customers may be required to pay substantial filing fees or share the arbitrator's fees and expenses.
  • Waiver of jury trials. Customers surrender their right to have a jury decide whether the dealer committed fraud or violated consumer-protection laws.
  • Limited appeal rights. Arbitration decisions generally offer far fewer opportunities for appeal than court judgments.
  • Prohibition of class actions. Customers cannot join together to pursue claims against a dealer engaging in similar practices with numerous customers.
  • Waiver of attorney's fees. Even successful customers may be contractually barred from recovering their legal fees.
  • One-sided attorney-fee provisions. Some agreements expose customers to paying the dealer's legal expenses if they lose.
  • Elimination of damages. Contracts may attempt to exclude consequential, punitive, exemplary, or other damages otherwise available under law.
  • Limits on total recovery. Even where fraud is proven, a contract may attempt to cap the compensation the customer can recover.
  • Broad releases of claims. Customers returning a few coins may be required to release claims involving entirely different purchases.
  • Confidentiality and non-disparagement provisions. These may discourage customers from speaking publicly about their experiences or warning others.
  • Disclaimers of salesperson promises. The salesperson promotes coins as investments, while the contract disclaims investment advice, warranties, or prior promises.
  • Unfavorable locations and laws. Customers may be forced to pursue claims in another state under the dealer's preferred laws.
  • Restricted refunds and cancellations. Short deadlines and final-sale provisions can make returning overpriced coins difficult.
  • Conditional buyback guarantees. Guarantees may require years of ownership, impose additional restrictions, or provide only wholesale resale prices rather than the original purchase price.

These Are Real Contractual Concerns

Nationwide Coin & Bullion Reserve (NCBR) has relied on buyback agreements containing releases extending to purchases beyond those involved in the buyback to prevent further litigation involving dissatisfied customers.

U.S. Money Reserve (USMR) has used agreements containing arbitration requirements, class- action restrictions, liability limitations, and conditional buyback guarantees.

U.S. Gold Bureau (USGB) publishes an agreement containing arbitration, jury-trial and class- action waivers, and limitations on recoverable damages.

Not every restrictive provision is necessarily enforceable. But why voluntarily purchase a legal dispute along with your gold?

Our Advice: Walk Away

If a coin dealer insists that you sign an agreement surrendering important legal rights just to buy coins or obtain a refund, find another dealer.

One suggestion: the Professional Numismatists Guild (PNG) requires member dealers to follow a Code of Ethics addressing honest representations, professional conduct, and consumer protection. PNG membership is not a guarantee against problems, and its members' contracts and arbitration procedures should also be reviewed.

Visit www.pngdealers.org to find a PNG dealer.

You are buying gold and silver—not selling your legal rights.