Minnesota’s reputation as a national coin fraud hot spot ends this week. Tough new laws that begin rolling out Aug. 1 will not only crack down on shady telemarketers hawking coins as investments, but should make the state a national model for policing a troubled, under-the-radar industry that often targets senior citizens.
Minnesota’s legislators had a crowded agenda this session. But a groundbreaking 2011 Star Tribune series on coin fraud, plus aggressive advocacy by Attorney General Lori Swanson, made it clear that Minnesota had a moral obligation to take the lead on this important consumer protection issue.
While there are many reputable coin dealers in Minnesota and elsewhere, work by this newspaper and Swanson revealed that unscrupulous operators were also at work, often from within our borders. Firms employing convicted criminals or high-pressure sales tactics left customers with coins worth a fraction of the dubious price tag or, worse, waiting for coins that never arrived. Embarrassment over being taken advantage of prevented some seniors from telling their families about the fraud and, by extension, from seeking redress.
Lawmakers this past session took practical steps to prevent dubious deals and help those taken advantage of. Beginning Thursday, most coin sales operations will have to post a surety bond — which will help victims recover money. Coins must also be delivered within a certain time frame. Key details, such as the precious metal content of coins, must also be disclosed.
Requirements taking effect next year will require firms to register with the state, do background checks on employees, and prevent hiring individuals convicted of financial crimes in the past decade.
“Coins are being pitched as investments to consumers, and this modernizes the law to match the marketplace,’’ Swanson said.
Minnesota appears to be the first state to put in place consumer safeguards like these. It shouldn’t be the last.