LOS ANGELES (CNS) - A $2.75 million settlement was reached with Lear Capital, an L.A.-based gold and silver coin dealer accused in a 2019 lawsuit of unfair and deceptive business practices, the city attorney's office announced today.
The lawsuit accused Lear Capital of routinely charging customers large fees under false pretenses, and 90% of the settlement will be used for restitution for eligible customers, according to the city attorney's office.
``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,'' City Attorney Mike Feuer said. ``They were entitled to trust that their legitimate questions wouldn't be met with threats or intimidation. But that's what we alleged happened.''
According to the city attorney's office, Lear Capital promised customers it would only charge a small fee for their transactions, but it collected about 33% of the customer's total purchase price in fees.
``Consumers deserve better. Now eligible customers will get money back, and future consumers will be protected,'' Feuer said.
The lawsuit also alleged that Lear Capital attempted to limit its paper trail while allegedly misleading customers. Customers allegedly discovered, once it was too late, that they were charged a 33% fee on their transaction, often after relying on Lear Capital's verbal promises.
The lawsuit also alleged that Lear Capital threatened customers if they publicly complained about the practice.
An attorney for Lear Capital told City News Service the company continues to dispute the claims made in the lawsuit but was ready to settle.
``Lear has vigorously defended the city's case from the outset and continues to dispute the city's allegations, but is pleased to put this matter behind it and move forward with its business. While Lear has always believed that its transaction process was best in class and that its customers understood and agreed to all transaction terms, including Lear's fee, Lear looks forward to enhancing that process further and continuing to deliver an excellent customer experience,'' said Seth E. Pierce, co-counsel for Lear Capital, Inc., in a statement to City News Service Monday.
The city attorney's office said that eligible Lear Capital customers will be contacted by a third party that is handling the claims administration process, with restitution expected to be paid in April.
Lear Capital is also required to change its business practices and obtain a customer's verbal consent to proceed with a transaction. The company must also inform a customer of his or her right to cancel the transaction without penalty and for any reason within 24 hours of receiving a written invoice, which must clearly state the transaction's fee.