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What Do Minnesota’s New Bullion Coin Dealer Laws Mean?

Minnesota recently passed legislation that will supposedly make it easier to regulate and track bullion coin dealers. The laws have more than their fair share of flaws, however, some of which we will discuss today.

First, the wording of the law leaves something to be desired. The law defines bullion coins as coins having “more than one percent by weight” of a precious metal, meaning that any one ounce coin containing even one-half of one gram of gold could be considered a bullion coin.

The law defines bullion coin dealers as anyone who engages in the buying and selling of bullion coins. That sounds like anyone who has ever bought or sold bullion coins, and from what I’ve read there is not much specificity regarding dealers anywhere in this legislation.

Fraud laws and the FTC, the CFTC and the Better Business Bureau, as well as web sites like RipoffReport.com and Scambook.com, all play a vital role in helping investors vet potential gold dealers. Requiring dealers to pay an annual fee of $25, plus $10 for each broker, sounds more like lawmakers looking for tax revenue than it does consumer advocacy.

While Minnesota’s new laws could eliminate some of the bad apples hoping to take advantage of naïve investors eager to buy bullion, the sad reality is that liars, scammers, schemers and fraudsters will continue to innovate new ways to take advantage of gullible, ignorant or simply trusting individuals. The best ways to minimize the risk of being defrauded by a gold dealer is to take advantage of the Internet and talk to people you trust who already own gold.

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