A new, first-of-its-kind state law that will provide a new layer of consumer protection for those who buy precious metals and coins goes on the books on Thursday.
The Star Tribune reports that the legislation may make Minnesota the first state to regulate retail coin dealers and telemarketers like financial advisers. The comprehensive law mandates criminal background checks and will ban employees who have been convicted of a financial crime in the previous decade. Dealers will be required to provide details about transactions in writing, and must itemize all of the coins that are traded.
Some dealers said the law goes too far and may drive smaller companies out of state or out of business. A spokesman for Minnesota Attorney General Lori Swanson said the new regulations are similar to those used by the state for oversight of payday lenders.
Starting next July the Minnesota Department of Commerce will provide additional oversight over dealers and their employees. Consumers will be able to look up licensed dealers and salesmen on the Commerce Department’s website.
In 2011, an investigation by the newspaper showed that the industry was populated with addicts, ex-convicts and con artists who misled or defrauded customers. The investigation concluded that Minnesota had a reputation as a hotbed of unscrupulous coin dealers.