Business ProfileforLear Capital, Inc.

Gov. Action
Los Angeles - City Attorney Mike Feuer announced today that his Office has secured a $2.75-million settlement with Lear Capital, Inc., a Los Angeles-based gold/silver coin dealer, to resolve allegations raised in Feuer's 2019 lawsuit that Lear had engaged in unfair and deceptive business practices. As part of this settlement, Lear is required to implement changes to its business practices, protecting consumers nationwide. Eligible customers can also receive restitution.

"This lawsuit was about trust. Lear Capital's customers, in many cases elderly or inexperienced investors, were entitled to trust that significant chunks of their life savings wouldn't be wiped out by astronomical fees. They were entitled to trust that their legitimate questions wouldn't be met with threats or intimidation. But that's what we alleged happened," said Feuer. "Consumers deserve better. Now eligible customers will get money back, and future consumers will be protected."

Feuer filed the lawsuit in June 2019, alleging that Lear Capital routinely charged customers exorbitant fees for their investments under false pretenses. For example, the lawsuit alleged that Lear Capital promised customers that it would only charge a small fee for their transactions, when in truth Lear often collected a fee equaling 33% of the customer's total purchase price. The lawsuit further alleged that Lear Capital endeavored to limit communications with customers to the phone, before purchases were finalized, thereby eliminating any paper trail of the allegedly misleading representations salespeople verbally made to customers.

As alleged, customers relied on Lear Capital's verbal promises, and often only discovered the actual fee Lear Capital charged for their transactions after it was too late - since Lear Capital typically did not provide the specific terms of any transaction in writing until the customer had already paid. The lawsuit additionally alleged that Lear Capital threatened customers if they went public about their complaints.

In addition to the $2.75-million monetary settlement, 90% of which will be devoted to restitution for eligible customers (the remaining 10% of which will go towards statutory penalties), Lear Capital must change how it conducts business, protecting consumers nationwide. Moving forward, for example, when obtaining a customer's verbal consent to proceed with a transaction, Lear must inform the customer of his/her right to cancel the transaction, without penalty and for any reason, within 24 hours of receiving the written invoice. Additionally, unlike before, the invoice will clearly and conspicuously state the actual fee Lear is charging for the transaction.

Eligible Lear Capital customers will be contacted by an independent third party handling the claims administration process, and Feuer's office estimates that restitution will be paid in or around April.

https://www.lacityattorney.org/post/in-victory-for-consumers-feuer-secures-2-75-million-settlement-of-lawsuit-against-precious-metals

Gov. Action
NEW YORK - New York Attorney General Letitia James today announced that she has secured $6 million from precious metals dealer Lear Capital, Inc. (Lear), resolving her lawsuit from June 2021 against Lear and its founder, Kevin DeMeritt, that alleged that Lear fraudulently failed to disclose millions of dollars in commissions the company charged consumers. As part of the consent order, Lear will modify its business practices in New York in addition to making the $6 million payment. The funds will be distributed to eligible New York customers harmed by Lear's misconduct.

"New Yorkers must be able to invest their life savings with confidence and know that their investments will be protected," said Attorney General James. "After years of misleading consumers, costing them millions in fees, Lear Capital's illegal practices end now. We've secured $6 million for New York consumers and the company will overhaul its business practices in New York. No longer will New Yorkers be subject to hidden fees pushed by fast-talking sales associates."

In her lawsuit, filed in June 2021, Attorney General James alleged that Lear persuaded investors -- including many elderly residents of Western New York who were seeking to safeguard their retirement savings -- to invest tens of millions in precious metals. The suit alleged that Lear did this while fraudulently charging undisclosed commissions -- up to 33 percent -- on millions of dollars in sales, and in violation of New York laws requiring commodity broker-dealers and telemarketers to register with the state.

As part of the consent order resolving this matter, in addition to paying $6 million, Lear has agreed to provide New York residents with clear and conspicuous disclosures of its fees and to provide a 24-hour cancellation period for retirement and certain higher fee transactions. Lear will also enhance its New York complaint tracking procedures and provide training to its personnel.

https://ag.ny.gov/press-release/2022/attorney-general-james-secures-6-million-lear-capital-ending-its-deceptive