Several local precious metals dealers The Oklahoman interviewed said they purchased their gold and silver bullion inventory from APMEX.
State agency regulates dealers
The higher number of precious metals dealers in the state has led to a growing need for more regulatory oversight of the industry, said Roy John Martin, general counsel for the state Consumer Credit Department.
The department received 11 written complaints regarding precious metals dealers in 2012, compared to five written complaints in 2011. Those numbers don't include complaints via phone that the agency fields.
The agency began saving data on precious metals dealers only a year ago, so it doesn't tell the full story of how much the business has grown in the state.
Martin estimates there were 30 to 40 licensed precious metals dealers in the state five years ago. There now are 162 precious metals dealers licensed with the state, down slightly from 183 precious metals dealers a year ago.
“I think there were a few that just didn't do well this past year and have just chosen to let their license go,” said Lindsie Lundy, administrative programs officer for the agency.
The department has hired eight examiners to help investigate complaints of unlicensed activity and violations of record keeping and storage requirements for precious metals dealers.
Licensed precious metals dealers are required to hold on to all items they take in for at least 10 days. The department also has drafted legislation to modernize state laws that regulate gold buyers. The Legislature is expected to take up the issue when it reconvenes in February.
State law requires the precious metals dealers to pay licensing and inspection fees to the state and also carry a $10,000 surety bond for each location they open.
Martin said precious metals dealers also must be fingerprinted and undergo state background checks. Applicants can't get a license to become a precious metals dealer if they have been convicted of a felony or crime involving fraud, theft or possession of stolen property within five years.
Current law outdated
Despite these regulations, most of the law regulating precious metal and gem dealers in Oklahoma was drafted in 1981 and is outdated, Martin said.
While the Consumer Credit Department checks for compliance issues when precious metals dealers apply for annual licenses, the agency has no authority to inspect the businesses and the precious metals and gems they purchase from the public. Current state law doesn't even allow for precious metals buyers to store their purchase records electronically. The statute requires dealers to record all of their transactions with ink on paper in a bound book.
Senate Bill 107, sponsored by State Sen. Roger Ballenger, D-Okmulgee, would give the agency the ability to inspect precious metals and gems that dealers in the state purchase.
The bill also would require dealers to display their state license numbers on advertising and give the agency the ability to assess civil penalties of up to $5,000 against precious metal dealers who violate the laws.
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To me, this is kind of like the modern version of gold mining, only you don't have to dig in the ground.”
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