Private mint to pay FTC $750,000 settlement

An issuer of commemorative coins and medals marking the 10th anniversary of the terrorist attack of Sept. 11, 2001, has agreed to pay $750,000 to settle Federal Trade Commission charges.

The firm, National Collector’s Mint, faced four charges of violation of the FTC Act and one charge of violating the Hobby Protection Act. The settlement is not an admission that laws were violated.

According to the FTC, Sept. 11, 2001, anniversary coins from Liberia sold by National Collector’s Mint are not sanctioned or endorsed by the United States government, and therefore are a violation of the Hobby Protection Act because they lack the word “copy.”

National Collector’s Mint is a Delaware-based corporation with offices in Port Chester, N.Y.

In a complaint for permanent injunction filed in the United States District Court, Southern District of New York, the FTC claims that NCM engaged in “deceptive marketing and sales of coins and collectibles” and NCM “prey[ed] on consumers’ desire to purchase purportedly valuable coins and collectibles.”

As part of the settlement, which remains subject to court approval, the NCM agrees not to misrepresent material facts about its products and services, and to clearly disclose, before a customer consents to pay for anything, the total costs and fees, any refund policy, and any limitation or condition that applies.

Coin, medal comparison

The complaint cites a noncirculating legal tender dollar coin issued by the firm on behalf of Liberia with a legend declaring 10TH ANNIVERSARY SEPTEMBER 11TH COMMEMORATIVE, that was sold for $29.95.

The obverse features a three-piece design, with each of the three pieces separately struck and then assembled. The main planchet into which the other two pieces are inserted depicts a section of the New York City skyline. The separate pieces rendered of the Twin Towers of the World Trade Center and the USS New York are made from copper and clad in 14 milligrams of .999 fine silver reported by NCM to have been recovered from Ground Zero.

The reverse bears REPUBLIC OF LIBERIA on a base below an eagle, with the denomination ONE DOLLAR along the bottom border.

Advertising for the coin suggested it was “exclusively authorized” and paid “homage to America’s heroes and remember[s] the day that changed America forever.”

The FTC complaint cited the potential for consumer confusion over the National Collector’s Mint’s products and official products of the United States.

The U.S. Congress authorized a national commemorative medal to mark the 10th anniversary of the terrorist attacks, and the United States Mint began selling the medal (in two Mint mark versions) in June 2011. Sales of the medal included a $10 surcharge per medal to be directed to the National September 11th Memorial and Museum.

The complaint notes that “defendants have sold and continue to sell their 9/11 commemorative at the same time that the U.S. Mint sells the original medal.”

The FTC calls the Liberian coins “imitation numismatic items” as defined by the Hobby Protection Act, which states that “‘imitation numismatic item’ means an item which purports to be, but in fact is not, an original numismatic item or which is a reproduction, copy, or counterfeit of an original numismatic item.”

Because of “consumer confusion,” the FTC claimed, the United States Mint published a consumer alert warning customers that “the only official United States coin or medal to commemorate the 10th anniversary of the September 11th attacks is the ‘National September 11th Memorial & Museum Commemorative Medal.’”

The FTC cited National Collector’s Mint for what it termed a “misleading and deceptive” ordering and return process, generating four violations of the FTC Act.

National Collectors Mint was charged with failure to disclose material aspects of the refund policy; mailing unordered merchandise; failure to disclose material refund policy terms; and failure to disclose total costs.

The FTC claimed the company used an automated telephone system that led consumers to receive merchandise that they had not ordered, “despite their repeated attempts to decline additional items.” NCM also allegedly “fail[ed] to disclose, or to disclose adequately, material terms and limitations of their guarantee and return policy.”

Consumers were unable in many cases to reach an NCM customer service representative.

According to the FTC, the National Collector’s Mint has generated more than $22 million in sales from more than 230 “varieties” of Sept. 11-related coins and other collectibles since 2008.

NCM advertising for the 9/11 commems included the disclaimer, “Not affiliated, licensed or endorsed by the US Gov’t or the US Mint.”

The 9/11 commemorative pieces offered by NCM were struck on Proof planchets of copper layered with 14 milligrams of 24-karat gold. ■

2013-01-30 13:33:17

Source: http://blog.jtcoins.com/private-mint-to-pay-ftc-750000-settlement.html