In response to numerous unscrupulous precious metals companies in Minnesota, that state recently enacted a law restricting gold sales in that state. Effective 7/1/14, all dealers inside Minnesota and even those selling into that state from outside must register with the state, post a sizable surety bond and adhere to Prohibited Conduct regulations– including telling clients what the purchase price is for the metals they bought, shipping the metals within 30 days, not misrepresenting material aspects of the coins–including future performance, earnings potential or profitability. They must not renegotiate the terms of sale or purchase after receiving a consumer’s payment without obtaining the client’s written consent (to avoid “bait & switch”). And they cannot steal client’s money or contact or solicit a consumer after the consumer has requested not to be contacted. (These are just the high points. Some other requirements are also included in the legislation).
This all seems fairly obvious and reasonable to us at Fairpoint. Our company practices actually exceed most of these requirements. We provide not only the purchase price that our clients are paying (hard to make a sale without that, in our experience), but we provide clients with our cost and buyback prices as well–so that they may have a full understanding of their purchase.
Aside from the possible view that the Minnesota State Legislature has no jurisdiction outside of that state, and that this law–however well intentioned–may violate certain provisions of the Federal Interstate Commerce Act, Fairpoint is joining many other gold dealers in declining to offer our products and services in the state of Minnesota at this time. As a national dealer headquartered in California, this one state does not constitute a large enough market for us to comply with these elaborate regulations.