For those of you not familiar with the law here in Minnesota here are some details.
The law was passed after a large fraudulent telemarketing firm was busted in the state. The intention was to crack down on these large illegal operations. The idea was to regulate coin dealers and their employees like you would a stock broker or an investment adviser, but the regulations seem to be too burdensome and expensive for most smaller businesses to comply. I read that to date very few local businesses have registered and no one from outside the state has done so.
Here are some of the requirements from the State of Minnesota website.
A bullion coin is defined as any coin that contains more than 1% precious metal and a dealer is required to register if they sell more than $5,000 of these coins in a calendar year. That would likely include almost anyone selling on E-Bay with even a relatively small volume.
The dealer is required to register with the state and post a $25,000 bond to settle any potential customer complaints. That would be make it difficult for any smaller dealers or casual E-Bay sellers to sell coins to Minnesotans.
There is also an extensive background check required for all owners, officers and "coin dealer representatives" of the company.
A coin dealer representative is defined as: "any natural person acting as an employee, contractor, or agent of a bullion coin dealer and who has interactions with consumers for the purpose of buying, selling, solicitation, or marketing of bullion coins or investments in bullion coins."
This is pretty straight forward when applied to a large telemarketing firm, but when you apply that definition to a small coin shop or dealer, does that mean every employee who deals with a customer, or someone who helps out at your table during the coin show. The guy I talked to at the coin shop in Ohio didn't know, so he didn't want to mess with it.
The background check must include: "... a national criminal history record search, a judgment search, and a county criminal history search for all counties where the owner, officer, or coin dealer representative has resided within the immediately preceding ten years."
The background checks must take place annually for all employees.
When the dealer sells a coin to someone, he must provide the following in writing:
•You must provide in writing to consumers (in a clear and conspicuous manner) the sale or purchase price and the precious metal content, if known, of the bullion coin.
•If you do not know the precious metal content of the bullion coin, then you must indicate in writing that the precious metal content is not known and the purchase or sale price is not based on the precious metal content of the bullion coin.
•You must provide this written notice to consumers prior to the bullion coin transaction or concurrent with the delivery of the bullion coin to the consumer. You must retain a copy of the written notice.
•You must also prepare a written invoice for each bullion coin transaction and provide a copy of the invoice to the consumer at the time of the transaction. You must also retain a copy the written invoice.
•The written invoice must include the following information: ◦Information that specifically identifies and describes the bullion coin being purchased or sold.
◦The quantity of bullion coin being purchased or sold.
◦The bullion coin's sale or purchase price.
◦The bullion coin's precious metal content, if known.
◦The registration identification numbers issued to you by the Department of Commerce. (Required after June 30, 2014)
◦The Department of Commerce's e-mail address and telephone number as follows
The dealer must also communicate the following for every coin he sells:
•The date you will deliver the bullion coin you have sold to them or the date that you will pay them for the bullion coin you have purchased from them.
•Your qualifications, affiliations and registration information and the qualifications, affiliations and registration information for your coin dealer representatives.
•The material aspects of the bullion coin you are marketing, selling, or purchasing, including the bullion coin's performance, efficacy, nature, investment value, central characteristics, liquidity, earnings potential, or profitability.
•The manner in which you will store or otherwise handle bullion coin received from a consumer.
Yep, the next time I buy a 1923
Standing Liberty quarter, I am glad that I will learn the performance history, efficacy and earning potential of the coin among other things and I want to know what qualifies the dealer to sell me that coin.
Here is the website where I obtained this information:
http://mn.gov/commerce/licensees/bu...ler-license/
Posted 11/20/2014 7:46 pm
