Bullion Direct Review

Bullion Direct was a precious metals supplier based in Austin, Texas, that was founded in 2000. As of July 2015, the company has filed for bankruptcy and is no longer operating. The story of how this company failed is important for all investors to understand before getting into precious metal IRAs. While early Bullion Direct reviews praised the company for its impressive selection of gold, silver and platinum in a variety of brands, later reviews shed light on the problems that would later bring the company’s downfall. Here is an in-depth look at the Bullion Direct scam and bankruptcy.

Bullion Direct Bankruptcy

When Bullion Direct filed for Chapter 11 bankruptcy in July, 2015, it had been selling precious metals to countless investors and storing purchased metals, apparently, for free. Yet when the safes operated by the company were opened after its bankruptcy, just a small amount of gold and silver was found. More than 6,000 claimants have emerged since the bankruptcy, resulting in a debt as high as $25 million for the former precious metals dealer. Some speculate that the debt may actually be far greater than that estimation. Incredibly, just one tax return was filed by the company during its 16-year run.

What Went Wrong?

Many Bullion Direct complaints have mentioned that delivery of purchased precious metals simply never happened. Indeed, according to the company itself, commenting after its bankruptcy, it did not buy precious metals that would be stored in its own vaults. Eventually, the company appeared to have even stopped purchasing metals for delivery.

Buried in the legalese within client contracts, the company said that it could essentially use stored precious metals as it saw fit and that the metals were not stored separately. We now know that the company interpreted this to mean more than any clients might have imagined. Using the funds sent to them for precious metals purchases, Bullion Direct instead invested in a new subsidiary it called the Bullion Direct Nucleo Exchange. With more than 30 employees at one point, the Bullion Direct Nucleo Exchange was supposed to match orders between clients in real time. Ultimately, the venture was not enough to save Bullion Direct from its hollow business model.

Early Warning Signs

The Better Business Bureau chronicles more than 178 Bullion Direct complaints that it closed over the past three years. The bulk of bad Bullion Direct reviews centered on failure to deliver precious metals that were purchased. It is no wonder, then, that the Better Business Bureau revoked the company’s accreditation. Not only did the precious metals dealer fail to honor resolutions reached by the BBB, but it also did not promptly respond to complaints or make efforts at dispute resolution. Bullion Direct bankruptcy occurred less than a month after the company lost accreditation with the BBB. Now, many industry observers also believe that the offer of free storage foretold the Bullion Direct scam that later surfaced.

How Investors Were Affected

Many a Bullion Direct review has covered the bankruptcy of the company and its ramifications. Investors have lost major savings from the Bullion Direct scam, and their recovery of those funds may take a very long time. Moreover, some observers believe that investors are unlikely to ever get all of their money back. It is the duty of this Bullion Direct review not only to warn investors about the potential of being scammed by shady precious metals dealers but also to remind investors of the difficulty involved in getting money back in such circumstances.

Early in the course of the company, Bullion Direct reviews glowed with compliments regarding excellent selection and free storage. Just before the Bullion Direct bankruptcy scandal, Bullion Direct complaints addressed the failure of the company to deliver purchased products. We now know that rather than being used to actually buy purchased metals, as investors believed, funds were being funneled into the Bullion Direct Nucleo Exchange. The takeaway from this Bullion Direct review should be this: Always approach precious metals dealers cautiously, research carefully and pay attention to complaints for the sake of your savings and your financial future.

Gold Investing Kit bullion direct review Bullion Direct Review Click here for Free Gold Investment Kit


Comments on this entry are closed.