Cache Metals
Precious metals bought on margin sold as stored physical metal

The scam that Cache has been running for the past 6 years is that they tell customers they are buying physical metal that is stored at vaulted locations in the US. In fact, that is not true. For leveraged accounts, they are buying metal on margin from a company out of the U.S. Cache tells you that you are buying a "portion" of a 1000 oz bar. That is not true either. You are buying metal on margin, where you only have ownership on Cache's books. Cache would give out a fictitious "commodity title transfer" telling customers they had been given ownership of metal at a vault. That of course was not true.

Cache was charging customers a fee for storage when in fact the metal was never stored, and they themselves were never charged storage fees by the company they were buying metal from. They were charging interest on leveraged metal, meaning that if you put down 10k you could buy as much as 30k worth of "physical metal". You would be financing the borrowed metal at a rate of 8.5%. Cache was also charging a "spread fee" of 3% on buys and sells, e.g. if silver was trading at $19.00, they would buy it at $19.00 and give it to a customer at $19.57; similarly, if you sold your metal you would get a price of $18.43. When you bought your "metal" on margin you always had to make sure it did not fall below 25%, or you would get a margin call and have to put up more money, or they would liquidate a portion or all of your metal.

If they were really buying physical metal, why, when I wanted to take delivery, did they have to sell my position to buy physical bars? I thought I owned physical metal; shouldn't I just pay the premium for the metal I wanted? If you ever wanted to sell your "metal", they would advise against it, even if the metal was falling. There were 3 main principles that would tell you not to sell. I was solicited by many telephone calls from a boiler-room type operation.

Leveraged metal only works in a bull market. A market trading lower will only make you lose your money and have to put up more money. I have asked Cache a lot of questions but they still cannot seem to answer these simple questions. The truth is that Cache was only buying metal on margin (a piece of paper); the metal was never stored, so we should never have been charged storage fees.

Company: Cache Metals
Country: Canada
City: Toronto
Address: 215B Davenport Road
Phone: 4169666660
Site: cachemetals.com

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