Legal Question in Business Law in California

Re: borkerage account for gold

Do not have your in-laws change there position at all or send any money to them. It may be a legitimate company or it may be a scam. It sounds like it could definitely be a scam to scam them out of their life savings. If they did sue your in-laws then there are probably many theories in which no contract would be enforced.

I also suggest that if they call again that you write down everything that they say or if they leave a message on a phone recording claiming that a debt is owed that the recording is saved. There is a number of theories whereby you can use this against them

Under the Fair Debt Collection Practice Act (FDCPA) if they call or harass your in-laws and do not comply with strict statutory requirements then your in-laws may sue them and receive compensation under a strict liability theory. If the gold company tries to collect the debt and does not do all of the things required under the FDCPA, even if they do not know about them, then they are liable for damages plus MANDATORY attorney fees. If this company does this to one person then they probably do it to thousands and thus a federal class action could be filed.

In addition under CA if your in laws did not agree to be recorded then a civil lawsuit again for strict liability may be filed for them recording your in-laws without there knowledge. Again even if they did not know the law in CA they are strictly liable if they recorded your in laws without their consent. Attorney fees may be awarded as well in that lawsuit.

It sounds as if your in-laws may have a case currently under the FDCPA and CA recording statutes right now against the company.

I would be more than happy to consult with your in-laws on this case.

Re: borkerage account for gold

In California, it is illegal to record a conversation without the consent of all parties when the parties have a "reasonable expectation of privacy." If you are told at the outset that the call may be monitored or recorded for training or "quality control" purposes, you have no reasonable expectation of privacy, and your consent is not required. But if the gold dealer did not ask permission or warn, it has committed a misdemeanor offense, and the recording could not be used as evidence. As to the other defenses your in-laws might have to an action on the check or on the alleged contract to invest, I'm somewhat less sure about the viability of the suggested defenses, but on the whole I think the in-laws would be on pretty solid ground to refuse to make good on the check or go through with the deal. As you can imagine, a jury would not be very sympathetic to the dealer; furthermore, how much damages could the dealer plead and prove? Not much, I'd bet.

Re: borkerage account for gold

Have them stick to their position of cancelling the deal. The worst that could happen is to be sued, but do you really think a scam artist broker is going to do that and expose themselves to scrutiny? Have your people complain to the SEC and other fed and state regulatory agencies if the broker does anything.