When you’re investigating gold IRA companies one of the first ones that shows up is Lear Capital. But is Lear Capital a scam or is it legit? That’s what we will be discussing here.
When you research a company there will be a ton of different websites that you have to visit to get the big picture. Here the goal has been to gather all of that information into one post.
We will have a look at the company itself and how it operates. We will have a look at probably the most important thing, their customer reviews. What does other people on the Internet say about Lear Capital?
How is their pricing compared to other companies? Are they cheaper or more expensive? How good is Lear Capital’s support and much more.
We will keep it on a very easy level and after the review you should know all you need to know to take an educated decision if you should do business with Lear Capital or not.
Sounds good? Lets begin looking at some quick facts about Lear Capital.
About Lear Capital – Some quick facts about the company
Lear Capital was established in 1997 and has it’s headquarters in Los Angeles, California. They have been around for a long time and if you have been researching about adding precious metals to your portfolio you have probably heard about them.
Their main business goal is to help their customers diversify their portfolio by adding precious metals bullion, premium rare coins or to help people add precious metals to their IRA.
Lear Capital has held a A+ rating with the Better Business Bureau since 2009. They are also a Professional Coin Grading Service authorized dealer.
So far this sounds very good right? Lets look behind the curtain to see if things are really that good.
Is Lear Capital’s pricing competitive compared to other IRA companies?
Lear Capital has a variety of products that they sell. It’s hard to say exactly how their prices are compared to other companies but it seams like their commission structure is around 25% which is very high.
- Bullion markup around 2-10%
- Numismatic (collector) coins profit margin at around 17 to 33 percent.
- IRA funds profit margin at between 21 to 29%
Lear Capital say that they have a market leading price guarantee although that only applies of you open a precious metals IRA account and transfer some funds into it.
The most important thing about Lear Capitals pricing is the talk about their up sell to numismatic coins (rare collector coins).
The fact is that when you are dealing with precious metals bullion there isn’t that much profit in it for a dealer. Because this is a commodity the price has to be close to the spot price for the commodity on the specific day that you purchase it.
One way for a precious metals dealer to up their profits is to sell you rare collector coins. Because when you buy a rare collector coin you are not just paying for the actual metal within the coin, you are also paying for the collector value of the coin.
This collector value is really hard to put a price on and is a great way for precious metals dealers to sell you a coin for a huge mark up in price.
The bottom line is: When you invest in precious metals you want to purchase bullion. Here you can easily see if the price for the metal is close to the spot price for that day. When a dealer wants to sell you a rare collectors coin that means you are on deep water and the chances of you getting scammed is very big.
It is on this collectors coin scams that a precious metals dealer can make big profits. This is the first big red flag for me. When a company is trying to push you into buying collectors coins they are just trying to up their profits on your expense.
Lear Capital got sued by a 81-year-old California resident
Maybe it’s hard to grasp the whole collectors coin up sell so lets have a look at a real case where Lear Capital ended up getting sued and had to settle in court.
in 2005, 81-year-old Evelyn Ireland called up Lear Capital after seeing one of their TV ads and wanted to invest some of her IRA funds into precious metals.
She wanted to invest $170,000 and the salesperson that she talked to convinced her to buy rare collector coins saying that “it was a better investment than buying regular bullion.”
In 2011 when Evelyn had a look at her investment she realized that her coins were still only worth $170,000 after 6 years. If she had invested in regular bullion her investment would have been worth around $600,000.
She took Lear Capital to court saying that Lear Capital intentionally misled her to buy collector coins in order for them to make a huge profit.
Lear Capital had to settle the case with Ms. Ireland and the terms of the settlement were never disclosed.
Although gold had gone up tremendously in value over the 6 years that she held her coins she had seen no return on her investment because she had bought coins from Lear Capital at an enormous markup.
How can Lear Capital afford expensive TV and radio ads?
As we were talking about before there isn’t that much profit in being a precious metals dealer unless you sell your bullion with a huge markup, often done through the sale of collector coins.
As soon as I see a precious metals commercial I instantly think: how can they afford this when there is a very low profit margin for a precious metals company?
The money to pay for these advertisements has to come from somewhere right?
This money comes from Lear Capital taking a huge commission on the precious metals that their customers buy. Without a huge commission, you simply can’t afford to run big TV and radio advertisements in a industry that is this competitive.
This is the second red flag for me. When you see TV and radio advertisements for precious metals you should think for yourself: are they paying for this by selling their precious metals way over the real price? Most certainly they do.
Lear Capital customer reviews – The most important factor
You can probably already start to feel that Lear Capital operates in a gray zone. If you apply some common sense and do a small amount of research you can see that they are not operating very honestly.
With that being said lets have a look at their customer reviews. This is probably the most important factor when you decide if you should do business with Lear Capital or not. What does other people say that has purchased precious metals from them?
Better Business Bureau
Lear Capital has 4 stars out of 5 with the BBB. But the most interesting thing is to look at how many complaints they have. Since 2009 there has been 39 complaints filed against Lear Capital with the BBB.
Have a look at the complaints summary below or go to the BBB website to read the full complaints summary.
There has also been 6 customer reviews entered at the BBB and they don’t paint a great picture either.
Another important website to look at when deciding on a precious metals company is Trustlink.
Lear Capital has a 4.5 star rating out of 5 with Trustlink based on 320 reviews. When you read through the reviews you can see that there are a lot of 2 and 3 star ratings where people are talking about Lear Capital trying to push them into buying collector coins.
If you truly want to do business with Lear Capital you should read some of the reviews for yourself.
Internet forum posts
Another great way to find out if Lear Capital is for you or not is to just do a Google search for the company. You will see a lot of forum posts where people are warning about doing business with Lear Capital.
You can hear about the big commissions that they charge and that people feel scammed. You can here about a lot of people saying that they waited for almost 2 months until they actually got their precious metals shipped to them.
You can also read about people feeling that their support staff is really pushy. Using deceptive sales tactics to try to get you to purchase collector coins where they can make a lot of profits.
If you want to read some of the forum posts you can start here.
Do you want to find a precious metals dealer with 0 complaints filed against them and a 5/5 star rating on Truslink? Read on to find out more.
Conclusion – So is Lear Capital a scam or is it legit?
I hope that you have gotten a greater insight into Lear Capital after reading this review.
Personally I wouldn’t say that Lear Capital is a scam directly. It’s actually a business and they have customers that are very happy about doing business with them.
Would I recommend you to do business with Lear Capital? Most certainly not.
Investing in precious metals is a big decision and you want to feel safe when converting your IRA to physical precious metals. There are way to many shady things about Lear Capital.
They pretend to try and help people diversify and that they truly understand that people purchasing precious metals seeks safety. But in order to gain a lot of profits for themselves they use deceptive sales tactics to try and lure you into buying rare collector coins.
Regal Assets – A precious metals company with 0 customer complaints
As promised I will show you a company that after extensive research into precious metals dealers stands out from the crowd.
Regal Assets have 0 complaints filed with the BBB (or any other organization for that matter) and has a 5 out of 5 star rating on Trustlink with around 950 reviews filed.
A precious metals company with 950 five star customer reviews! Now that’s what you want to see when choosing a precious metals dealer.
Regal Assets have been featured in the Investment Guide by Forbes Magazine. They were also ranked number 20 by Inc. Magazines Inc. 500 in financial services.
This is a company that has been around since 2003 with nothing but good things to read. In fact, I challenge you do find a bad review about Regal Assets. If you find one please leave a comment with the link below.
Maybe Lear Capital is still for you but I recommend you to read the full Regal Assets review before you decide on which precious metals dealer you should do business with.
I hope we have answered the question: is Lear Capital a scam or legit by now and I thank you for reading. Please leave a comment below if you have any questions or input. Otherwise click the button below to read the full Regal Assets review.