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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 4433
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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Hello, Id like to ask if Im legally bound to a purchase of

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Hello, I'd like to ask if I'm legally bound to a purchase of gold bullion transaction done over the telephone? I sent a check and ended up putting a stop payment. I never received any gold but I did receive a notice that this supposed contract I made was sold back into the market at a loss. So now I owe them money without getting any gold. Am I bound to this contract? Thank you

Dear Friend,

 

Perhaps yes. But yes, only if they have any proof of executing transaction over phone and you instructed them to do so. If you have instructed, they would have given you the buy contract / confirmation of trade and most brokers have voice recordings.

 

SO, if they prove it, that you had called up to put transactions for and on your behalf, then you may be liable. Also, when you sent a check, you implicitly agree that check is towards some consideration.

 

So, if you can prove that you have never placed the order to buy, its fine. But otherwise, you may be liable for the loss of squaring off of the transaction.

 

I hope this helps...

Warm Regards,

Rakhi Vasavada and 2 other Finance Specialists are ready to help you
Customer: replied 5 years ago.
Thank you for your help!! I believe that I am bound to this contract. And will pay.

Dear Friend,

 

Yes, you may be bound, but subject to the conditions mentioned in my reply. Get your papers checked with local attorney if you still have doubts.


Warm Regards,

Customer: replied 5 years ago.
Hello again. you've been most helpful. I did authorize the buying of the gold over a recorded conversation. But I did not authorize a sell contract. Does this matter? If we were to settle on current prices my losses would be small to none. I'm thinking about filing a complaint to the CFTC. This guy called me everyday and I finally gave in to his advise. I thought maybe he knew something that I don't. He got me in at a multiweek high and then sold at the low. Sorry if this to much info. thanks

Dear Friend,

 

I got your question completely and I fully understand it.

 

Try and understand. You authorized to put a trade to buy gold. Now if the prices fall, and if you do not want to pay and stop check payment, the broker will NOT wait and carry the position on his own. He will naturally square up, i.e. put the opposite order and in this case sell it off. You are entitled to receive the difference if sold at higher price and entitled to pay up the difference also, as in this case, it is sold at lower price.

 

Even if you file a complaint, you do not have any valid and tenable grounds. The broker is on the right side of the law. You only have two options. Either bluntly refuse to pay up and default and see what the broker can do or if he comes after you for payment, OR, simply pay up.

 

I hope I am clear to you. I may not have told what you would have liked to pay but I have tried to give you correct advice.

 

Warm Regards,

Rakhi Vasavada and 2 other Finance Specialists are ready to help you