Is Lear Capital a Scam? [Review] – Lawsuits & Loads of Complaints

Lear Capital Review

by Anders

October 28, 2020

Wondering if you should trust Lear Capital to invest in precious metals? Are they legit? Is Lear Capital a scam?

It may sound like a bit of a ridiculous question to ask about a company that has been around since 1997, however, you do have people calling this place a scam. You do have lawsuits that have been filed against the company for deceptive practices... and more. So is this place trustworthy and legit?

Well, in this Lear Capital review I'll be going over all you need to know about the company, including what they provide, who's running it, whether or not their prices are competitive, fees, complaints and more.

Let's begin with an overview of Lear...

Overview

Lear Capital

What Is Lear Capital?

Lear Capital is a full-service precious metals dealer that offers bullion, numismatic rare coins, as well as precious metals IRAs for those looking to invest for retirement. Gold and silver are the main options here, but they also sell platinum as well.

Customers are able to purchase physical precious metals and have them shipped to their address, or there are storage options they offer, which you must use if you're looking to open a precious metals IRA.

Additionally, they also provide some free investment resources, such as a  "Free Gold Kit" that provides information on investing in gold, as well as market charts, price notifications, the Lear Learning Center which is a library of information regarding precious metal investments, and a Smart Tools Suite that includes an inflation calculator, RMD estimator, spot prices and more.

*The company offers a lot and makes investing in precious metals incredibly simple, but all-in-all this isn't a company we recommend using - you'll see why after reading this review.

Company Details:

Lear Capital was founded in 1997 and is located in California, USA... or more specifically...

1990 S Bundy Dr #600
Los Angeles, CA 90025-5256

They can be contacted at:

  • (800) 576-9355 to talk to a representative
  • (800) 885-5327 for the customer care line
  • customerCare@learcapital.com for email support

According to the BBB's website, they have some connection with themetalexchange.com, which is actually listed as one of the company's website addresses. This doesn't tell us much, but we do know that this other website, which is a precious metals dealer as well, was created by a group of "senior American precious metals veterans".

Kevin Demeritt is listed as the founder and chairman over at Lear. His background is that of an investment analyst. He's an analyst who has had over 1,000 interviews on talk radio and is very bullish on tangible assets such as precious metals. Furthermore, he's an author, his book The Bulls, The Bears and The Bust being focused on economic cycles, trends, debt and diversification investment strategies.

The CEO of Lear Capital is listed as John Ohanesian. He's a businessman with a background working as President & CEO of Bosley, Inc for two decades, during which he helped take the company from being a small business to being a leading hair restoration brand.

Can You Trust Them?

They are accredited by the BBB and have a Business Consumer Alliance membership, and the company leadership seems to be good quality, but there are also quite a bit of complaints about them, as I'll go over, so I wouldn't make any purchases just yet.

Most complaints are along the lines of being severely overcharged for coins, not being able to sell purchases back to Lear for much money, and just losing money by investing in precious metals through Lear Capital in general.

What They Offer

If you're looking to invest in precious metals through Lear Capital then you have 2 main options: 1) to purchase precious metals and store them yourself, or 2) to open a precious metals IRA account and enjoy a tax-free investment while having them stored in a vault, fully insured.

1) Buy Precious Metals

When you purchase gold, silver, or platinum through Lear, your metals will be shipped to an address of your choice. 

I'll be going over the safety of their shipping method in a bit.

Gold:

Here you will find a number of different gold coins and bars. Many of their coins feature patriotic American designs, but they also have other global design options.

Below is a list of only some of what they offer just to give you an idea...

  • $10 Liberty Gold Coin (Circulated)
  • $20 Gold Liberty
  • $5 Liberty Gold Coin (Circulated)
  • American Gold Eagle Coin (all sizes)
  • Gold 1 Ounce Bar
  • Gold 10 Ounce Bar
  • Gold American Eagle Proof
  • Canadian Gold Maple Leaf Coin
  • Gold Krugerrand (1 oz ) Coin
  • Gold Buffalo
  • Austrian Vienna
  • Philharmonic Gold
  • Gold British Sovereign Coins
  • Gold Polar Bear by The Canadian Royal Mint

Silver:

Their silver selection isn't quite as extensive, but they still offer a lot. Again, here you will find a number of coins as wells as bars, some of which include...

  • Canadian Silver Maple Leaf
  • Morgan Silver Dollar (Pre-1921 Circ.)
  • Proof Silver American Eagle
  • Proof Silver Polar Bear ($8) Graded | Lear  Capital's Exclusive Silver Coin
  • Silver 100oz. Bar
  • Silver 10oz. Bar
  • Silver American Eagle
  • Silver Peace Dollar (Circ.)
  • Silver Rounds (1 oz)

Platinum:

If you want to purchase platinum you only have one choice... the Platinum American Eagle coin...

Their "Up To $500 Offer In FREE Coins"..

One offer that they've been running for years now is for getting up to $500 in free coins...

This has been advertised on the radio and television, so I think it's important to address what it actually is.

Yes, you can get "free" coins, but they aren't really "free" because this offer is only available with large purchases.

There is a $5,000 minimum purchase and this still will only qualify you for $100 in "free" coins. If you want to qualify for the full $500 in "free" coins then you will have to make a $25,000 purchase from them... a bit misleading of an advertisement. 

2) Gold & Precious Metal IRAs

The IRAs Lear offers are self-directed IRAs. This means that you can make alternative investments, such as in the precious metals that they offer.

The process of setting up your IRA account is simple - just have to fill out an IRA account form and then fund your account.

If you have an existing retirement account, such as an IRA or 401(k) then it may be eligible for a rollover, which is tax-free way to convert your retirement savings into a precious metals IRA at Lear Capital. But I'm not going to get into the fine details here. The specialists at Lear can help you out with this if you decide to go through with it. The first step is the same regardless... you have to fill out the IRA account form.

With this option the precious metals you invest in are stored in a IRS-approved depository vault, which is required by the IRS if you are to invest in precious metals in an IRA account.

Selling Back to Lear Capital

The other option you have, if a customer, is to sell your precious metals back to the company. However, this isn't guaranteed and if you are interested in doing so you will have to contact customer service. 

When Lear does buy back precious metals they do so at spot prices, which means it's better to only sell bullion back to them. If you make purchases of numismatic coins you will be paying higher prices for the design and whatnot, but will only be able to sell them back for the quality and weight of the metals at their spot prices.

This option seems to be available to those who have Lear store their metals as well as to those who have them shipped and stored at a location of their choosing.

Prices & Fees

Prices

Let's first take a look at the prices that coins and bullion are being sold for at Lear and see if they are competitive or a ripoff.

Right now, as I'm writing this, the price of gold is listed at $1,905.00 on Monex. At this very moment the 1 ounce gold bar is available for purchase on Lear's website at $2,170.39. That's a little over a 12% increase in price, which is a good bit higher than other full-service precious metals dealers we've reviewed here at Green Bull, such as Neptune Global Holdings - the US Gold Bureau is always a good choice to buy from as well.

Fees

IRA Maintenance

As answered in the IRA FAQs section of the website, the cost to have an IRA account with them is $160/yr. This includes everything... the storage fees, insurance, quarterly financial statements, and access to your online account.

Shipping

If you are making a purchase to have shipped to you then you have to also pay shipping. This is reasonably priced and will vary depending on the size and value of your purchase, which makes sense.

For example, on the website I added an American Gold Eagle Coin (1 oz) to my cart and the shipping charge was calculated to be $26 - a Gold 10 Ounce Bar's shipping cost was found to be $45. This may seem a bit much, but includes insurance as I'll talk about next.

Is Lear Capital Safe?

Can you trust them handling your precious metals? Let's talk about storage and shipping.

Storage

On their website they mention that they use the Delaware Depository for storage, which has been around since 1999 and is a well-trusted vault storage option for precious metals. All metals stored here are 100% insured for the full value. This protects against physical loss or damage coming from any cause... theft, fire, flood, etc.

However, I've come across reviews stating that they use a Brinks depository located in Salt Lake City, Utah... which I couldn't find out any more information about. 

Either depository is a safe storage option in the end.

Shipping

If you don't want to make a precious metals IRA investment and go to purchase coins or bullion on the website, you will see a badge stating that shipping is "secured, discrete, & insured"...

However, there wasn't any more information I could find on this matter.

How do they ship you your precious metals and is it safe?

Well, although they don't tell us this, it makes sense that the Delaware Depository would also handle the shipments. They use them to store precious metals for IRAs and the company also offers shipping options (remember, this is the depository the mention on the official website). It makes sense that they have all their precious metals stored in vaults at the Delaware Depository and that this 3rd party handles all the shipping and storage.

This is good news because all of the DD's shipments are fully insured and require a signature upon delivery to help ensure safety. Their standard shipping method is FedEx Ground and you can ship up to $100,000 worth of metals per package.

Complaints, Controversy, & Lawsuits

Okay, now on to the part of this review that isn't so great. Up until this point Lear Capital seems like a safe bet... but you'll definitely want to read these complaints before making any purchases.

#1 - Fees Not Mentioned

Below includes a mixture of complaints found on the BBB's website as well as at Retirement Living. There have been multiple people complain about high fees of 33% that are not mentioned Yes, you read that correctly... FEES OF UP TO 30%!...

There is no mention of fees nearly this high, but this is likely because of a lawsuit against Lear Capital back in 2019... which stated that customers were being charged fees as high as 33%. Not only that, but Lear was sneaky about it and would only deal with customers over the phone to eliminate any paper trail while leading customers to believe the fee being charged was much lower.

I was also able to find an older lawsuit from 2017 where a woman lost 1/3 of her account in fees without knowing it. Her account was $300k to begin with and after the 1/3 was taken out it was down to $200k, which caught her by surprise.

#2 - Wrong Items Shipped

Below is a complaint from a customer that claims to have ordered and paid for 1oz coins but only received 1/2oz coins... meaning they lost 50% from the point of purchase...

If true this is a disaster, but the good news is that this was the only complaint of this kind I was able to find.

#3 - Buy-Back Only at Spot Price

There have also been complaints about them only buying back coins at the spot price. I haven't noticed any major differences between the spot prices and the cost of coins/bullion, but one customer claims to have lost 50% from their transaction...

#4 - Poor Customer Support

With good quality customer support you would expect to be advised in a way that is best for your personal financials. Lear doesn't seem to be very interested in this. I've also found some complaints with Business Consumer Alliance, one of which is shown here and is from someone who lost $20k, which they believe was in part due to a Lear representative knowing that the they were losing money but failed to mention it...

#5 - Too Salesy

I've also come across a number of complaints on the overly-salesy, pestering nature of the salespeople that work for Lear. Apparently they will keep nagging you until you purchase from them, which I imagine can get pretty annoying.

Not only that, but according to Truth In Advertising they require customers to sign a lengthy contract before conducting business, in which they state that the company “does not provide tax, investment, or legal advice or advisory services, …”.

So then what does this mean? Well, Truth In Advertising labels them as "mere salesmen (and women)", but they can be a bit too harsh at times. While true that they state they don't actually provide advisory services or investment advice, the representatives and people running the business aren't just random people from the street. They are very knowledgeable in precious metal investments and IRAs.

Long Delivery Time

I'm not entirely sure why it takes so long, but they can take up to 28 days to deliver orders.  And this is 28 days after a payment is received, meaning that if you pay by check you will first have to wait for the check to clear and then possibly up to 28 days more.

Are there any good reviews on Lear Capital?

The answer is yes. In fact, this place has a very good rating on Trustpilot (last I checked it was a 4.7 out of 5). However, I question the legitimacy of this rating. Many of the reviews seem to be encouraged by the sales reps, as they always mention the names of the sales reps in a way that just doesn't seem genuine. This is just my opinion however.

Pros v Cons

Pros

  • Full-service dealer - can buy, store, and sell precious metals through them
  • Precious metals IRA accounts available
  • Have been around since 1997 (means they must be a good company, right?... not really)
  • Phone support available
  • BBB accredited

Cons

  • Lots of complaints
  • Have had lawsuits filed against them for extremely high fees (seems to have changed)

Who Lear Capital Is Best For

The company, as you know, is a full-service precious metals dealer. This is the type of place that attracts customers looking to invest in precious metals and hold onto them themselves as well as those looking to invest and benefit from the tax exemptions IRAs offer, since they do offer the IRA investment option.

However, after really digging into things and doing the research I can say that I do not recommend using this company if you are looking to invest in precious metals. They don't seem all that trustworthy and appear to be much more focused on scraping clients for every penny they have rather than helping them invest safe and grow their accounts.

Conclusion - Worth Using?

So, we know that Lear Capital is a full-service precious metals dealer that provides all the precious metals investment options one really needs. They make things easy when it comes to investing in gold & silver and have representatives that are available via phone support to walk you through every step of the investment process, whether it be buying precious metals and having them shipped to your home or investing in a precious metals IRA to enjoy the tax exemptions.

Yes, they make things easy, but there are lots of options out there... so should you use Lear Capital?

Of course the ultimate decision is up to you, but this is not a company we are going to be recommending here at Green Bull Research. Yes, it seems that the company has changed a bit (for the better) since it was hit with the big 2019 lawsuit accusing them of predatory selling practices, in which customers were unknowingly paying fees as high as 33%, but I think there are still much more trustworthy options out there... and better prices on precious metals available as well.

Hopefully this review has provided some value to you and will help you make a more informed decision on whether or not to go through this company with your investments. 

As always, let us know what you think of it all in the comment section below.

About the author 

Anders

Anders is the founder and chief editor of Green Bull Research. When he's not investigating new opportunities and adding to his portfolio, you might find him taking a nature walk or reading a Steven Pressfield novel.

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  1. We want to thank you wholeheartedly for putting the information out about Lear Capital. As a novice investor just looking to increase my retirement money it is invaluable to me to be able to read what I believe is a decent in-depth analysis of a company I was interested in doing business with. Thank you for the honest assessment. Now on to another company and starting my research all over from the top again.

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