Monday, April 30, 2012

A Sucker Born Every Minute: The Franklin Mint Ripoff


Ever watch one of those ridiculous Franklin Mint commercials and wonder how a company peddling such a blatant ripoff could ever possibly stay in business? I mean, just how dense, for instance, does a person have to be to believe a "one ounce silver collectable coin" contains much if any silver when it is selling for half or less of the current spot price of the precious metal? Well, now we know the answer as shown by this letter sent to Financial Advisor Malcom Berko and published in the Herald-News:
Dear Mr. Berko: During the past 25 years, I purchased more than $47,000 in collectible silver coins and beautiful non-silver coins from the Franklin Mint for my retirement because I thought the scarcity and limited-edition minting of these coins would drive up their value over the years and because I believed the silver content in the silver coins would also increase in value. Now I’m 64 and decided to sell these coins to a coin dealer who offered me $2,500 for the whole lot. He told me most of the coins were worthless, and the only coins that had any value were those with silver in them. I was devastated because when I was buying all those coins, the people at the Franklin Mint told me these coins were minted in limited production and would be more valuable to collectors in the future. I called two coin dealers in Detroit (these coins are too bulky to carry around) and both said they had no interest in Franklin Mint coins and said they don’t know any dealers who would buy them from me. My son told me to write you because he said you might know of buyers for them, and at this point I’d be very happy to get at least half of what I paid for them if possible. Please help me if you can. And if you cannot help me, do you think I can sue the Franklin Mint and recover my cost? And could you recommend a lawyer for me to sue them?

DA

Troy, Mich.
Okay, I dabble a little bit in precious metals myself as I am sure many of you do who are part of the reality based community, so it was probably very cruel of me to be literally laughing my ass off when I read this. Sorry to be such a bastard. I just couldn't help myself. And how perfect is it that the letter writer is from TROY, Michigan. I tell you, the Gods these days are gleefully mocking us dopey chimps.

Actually buying a couple of Franklin Mint pieces of crap is one thing (I think the wife and I have a phone ordered "collectable" or two lying around somewhere). Blowing $47,000 over a quarter of a century without ever ONCE checking with someone who doesn't work for the company to find out the real value of the merchandise places this guy (or gal?) very high on the list of the world's all time biggest suckers.

Being a much better man than I am, Malcom Berko was far more diplomatic in his response to this inquiry than I would have been:
Dear DA: Certainly, you can sue the Franklin Mint. Frankly, it’s their fault you purchased those coins, it’s their fault you overpaid for the coins, it’s their fault the coins did not increase in value and it’s their fault the coin dealer in Troy won’t give you $47,000 for your collection or the dealer in Detroit doesn’t know a soul who would pay you at least $23,500 for your collection. And because it’s the Franklin Mint’s fault, I can’t help you recover your costs. But some lawyers will do their best to get you a settlement, demanding an advance fee before they pick up a pen. However, that settlement will probably be a 20 percent discount on your next Franklin Mint purchase and no shipping charges. But any attorney I know will tell you that you don’t have a chance in China for recovery.

In 1984, I purchased a die-cast, 1935 Mercedes Benz 500K Roadster from the Franklin Mint and sent them a check for $150. Although it was “to scale, “ it was made in China, poorly and cheaply constructed; parts and pieces would fall off, and when the Mint wouldn’t return my money, I tossed the Benz in the garbage. They also make limited edition plates, knives for collectors, figurines, Star Trek plaques and other ridiculous collectibles. One of the Mint’s biggest coups a dozen years ago was the sale of millions of dollars of collectible plates, jewelry and dolls with the image and likeness of Diana, Princess of Wales. Today, that stuff isn’t worth a penny, shilling or pound. You gotta be careful out there.

You overpaid for those coins by orders of magnitude. And you probably paid five or six times the value of the silver content for the silver coins you purchased. So while sliver has tripled in price since 1984, the silver value of those coins is still way less than your cost. I don’t know of a single item produced by the Franklin Mint that can be sold today for its original cost. The Franklin Mint, like the Danbury Mint, the Washington Mint and others with grand-sounding names are selling organizations that place full-page, impressive and official-looking advertisements in local papers with high-sounding words that give the impression of U.S. government affiliation. (It’s disappointing that some newspapers accept those advertisements because the acceptance gives instant credibility to those claims.) The advertisements always are carefully prepared with clever buzzwords designed to infer great value and urgency but grossly misleading to most readers who lack the knowledge to make an intelligent buying decision.

DA, you’ve been snookered, and there’s no chance for recovery. However, I suggest that you separate the silver content coins from the hundreds of medallions and other junk coins and visit the coin dealers once again. But be mindful that most of those dealers will try to swindle you. They recognize you’ve been swindled before (they know this is Franklin Mint stuff) so they figure you are an easy mark. You may have to wear out a lot of shoe leather till you find a dealer who is willing to give you a fair shake. Then try to sell the worthless coins on eBay, and you might get 100 bucks.
Okay, I've composed myself and am going to stop being so mean to the letter writer. After all, he or she really isn't any different than people who bought houses at the peak of the housing bubble because they believed the shysters who told them that home prices only go up, or people who have been furiously pumping their money into their 401(k) accounts and continue to do so even though they have seen little in the way of real returns these past 12 years and have actually lost a huge amount of their nest eggs due to inflation, or really anyone who falls for any of the countless scams being perpetrated by corporate America these days--fleecing their customers in pursuit of ever larger profit margins. Our whole "free market" economy has become one big swindle. The letter writer in this case just got taken a little easier than most people do.


Bonus: The letter writer would have been far better off investing in the New Pornographers' most recent CD

10 comments:

  1. This whole damn civilization these last 8000 years is like the Franklin Mint: a confidence game that makes a few rich at the expense of the rest of the world.

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  2. Diplomatic is right - my answer would have contained a lot of words in all caps...

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  3. Dear DA. You could wrap up your affairs, grab your shot gun and go pay a visit to Franklin Mint. After taking care of business there, suicide. Anything else will only cost you more money and get zero satisfaction for you. The lawyers on the other hand will be laughing their guts out behind your back as they suck you dry too.

    Some days I think Marvin Heemeyer had the right idea. Driving a bulldozer through the business that screwed you over is a nifty idea.

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  4. Aw, Bill, I think you are being unfair to Mr. Berko. Put his gullibility into context. For just one example out of countless possibilities, consider this:

    What do you suppose the aggregate waste of money spent in the US, never mind the world, on cosmetics, nail and hair salon visits, cosmetic surgery, and clothing and accessories bought purely as fashion statements amounts to?

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  5. The entire economy is one big swindle. Works for me. I agree with Gail. We waste a ton of money on worthless junk every day, every year.

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  6. One thing that should be considered is that the ORIGINAL Franklin mint produced some of the highest quality "collector" coin sets in the late 1960s to mid 1970s. These sets frequently contained a large amount of silver (for example, the Bahamas proof sets with silver 50 cent, dollar, two dollar and five dollar coins - over 4 ounces if memory serves). At the time, a set like this was less than $50 so these particul sets are worh a lot more thani ssue price now just for their silver. That is not to say that they were a "good deal" at the time of their issue but turned out to be over time. I agree with the sentiment in the article and comments regarding the newer material.

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  7. In 1984, I purchased a die-cast, 1935 Mercedes Benz 500K Roadster from the Franklin Mint and sent them a check for $150. Although it was “to scale“ it was made in China, poorly and cheaply constructed mecedes

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  8. I would not be so sure that you don't have a cause of action if you could find the original ad that induced you to buy; sellers were less cautious in the past and courts are more liberal in awarding damages, today. A successful plaintiff might send a message to deceptive sellers; more specifically, the aggrieved buyer above may get a settlement offer to quiet them.

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  9. Today, I sold 50 Franklin Mint coins to a coin dealer for $26/- Canadian each. They were from 1977 and belonged to my elder brother who is no more. I also sold 100 car ingots for $26/- each. I don't know whether I got a fair shake for both. Comments, good or bad, welcome.

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  10. I have a bridge for sale.

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