Goldline agrees to pay refunds to ex-customers.
Santa Monica, California, precious metals dealer, Goldline International Inc. one of the nation's largest gold retailers, as resolved a criminal prosecution by agreeing to refund as much as $4.5 million to former customers.
Goldline agreed to an injunction that requires the company to "change its unfair sales practices" and to disclose price markups in recorded telephone conversations with customers.
The Santa Monica city attorney filed a 19 count criminal complaint in November against Goldline, accusing the company of running a "bait and switch" operation in which customers seeking to invest in gold bullion were instead sold gold coins that were marked up more than 50%. Six current and former employees were also charged.
Goldline has used radio talk show host Glenn Beck as a pitchman.
The agreement calls for a third party to monitor the injunction and make sure the company is disclosing the markups, through undercover buys, recorded telephone calls, and meeting with employees.