A Los Angeles-based gold and silver coin dealer has agreed to a $2.75 million settlement with the City of Los Angeles to settle allegations of unfair and deceptive practices, according to city attorney Mike Feuer.
The settlement stems from a 2019 lawsuit filed by Feuer against Lear Capital, Inc. in which he alleged that the company charged customers excessive fees for their investments under false claims.
At the time, Feuer said that Lear Capital needed to be held accountable for misleading customers.
"The myriad of unfair and deceptive practices our lawsuit alleges–preying upon elderly and inexperienced investors, misleading consumers about often astronomical transaction fees, threatening that its legal department will 'eat [consumers] alive' if they go public, sometimes wiping out huge chunks of life savings in the process—must stop," Feuer said in press release.
The agreement calls for the company to alter its business practices in order to protect customers across the country with eligible customers able to receive restitution.
Seth E. Pierce, a partner at the Los Angeles-based law firm Mitchell Silberberg & Knupp, represented the company against the city and said the company denied the allegations, but is looking forward to continuing its business practice.
“Lear has vigorously defended the City’s case from the outset, and continues to dispute the city’s allegations, but is pleased to put this matter behind it and move forward with its business,” Peirce told the Southern California Record. “While Lear has always believed that its transaction process was best in class and that its customers understood and agreed to all transaction terms, including Lear’s fee, Lear looks forward to enhancing that process further and continuing to deliver an excellent customer experience.”
The lawsuit stated that the company told customers that there was minimal fee for their purchases while Lear accumulated a fee equaling 33% of the customer’s total purchase sum.
Additionally, Lear Capital was accused of mitigating phone contact with customers before they could make a purchase in order to hide documents of the deceptive representations salespeople allegedly told to customers.