Elders too easy a mark for coin fraud: Safeguards are needed in a state known as a hot spot.

An old-fashioned sense of trust and a Depression-era-influenced desire for tangible investments has too often made older Minnesotans an easy mark for unscrupulous telemarketers selling gold and silver coins.

With many of the nation's most notorious operations based in Minnesota, the state has an obligation to rein in a troubled industry that has let too many ex-cons into its ranks and has left too many senior citizens and other investors waiting for expensive coins that were paid for but never delivered -- or paying thousands of dollars for "collectible coins" or counterfeits worth a fraction of their inflated price tags.

Minnesota legislators may have a crowded docket this session, but passing legislation that offers up overdue consumer protections should be high on the list. With a few tweaks, a practical bill announced last week by state Attorney General Lori Swanson and Commerce Commissioner Mike Rothman could well become a model law for other states. The bill's legislative champions are Assistant Senate Majority Leader Katie Sieben, DFL-Newport, and Rep. Debra Hilstrom, DFL-Brooklyn Center.

"The tragedy is that when senior citizens are targeted for fraud, they can't go back to work and earn back the money,'' Swanson said. "It's horrible. When the money's gone, the money's gone.''

It should be pointed out that there are many reputable coin dealers in Minnesota and elsewhere. These honest businesses' reputations have been unfairly tarnished by telemarketers who employ convicted criminals and turn them loose with high-pressure sales tactics. Because coin dealers aren't required to be licensed, virtually anyone can peddle coins that sell for thousands of dollars.

Star Tribune reporter Dan Browning has done groundbreaking work detailing these shady operations' tactics and growth in Minnesota, which is known as a coin fraud hot spot. These firms develop scripts that play on people's fears of the government or a stock market crash. Lists of those who buy are often passed between various operators. Those unlucky enough to do business with one are likely to get barraged with calls from other smooth-talking pitchmen.

Browning found that many people are too embarrassed to come forward after they've lost money. He also learned that authorities are often unable to assist those who didn't get their coins, because there's little documentation. "I get two to three calls a week from people who got ripped off," said Browning, noting that many people feel like they have few other places to turn for help. The Attorney General's office recommends contacting local police, the sheriff's office, the county attorney or the Federal Bureau of Investigation if you've paid for a coin that didn't arrive.

Browning's work, along with the aggressive lawsuits filed by Swanson against unsavory operators, have given lawmakers ample evidence that action is needed. The proposed bill acknowledges the reality that coins are being sold as investments with little oversight. The legislation would put in place consumer protections similar to those required for the sale of other investment products. Dealers with felony, theft or financial-crime convictions would be banned. Dealers and sales staff would have to register with the Commerce Department. State officials would develop a background-check process and require firms to post a surety bond -- which may help victims recover money. The bill also would require delivery no more than 30 days after payment and would put safeguards in place to prevent the misrepresentation of coins' value.

Hilstrom and Sieben should consult the state's reputable coin dealers, who have suggestions for strengthening the bill, but it's critical that the legislation move forward. Coin fraud is a serious problem, and safeguards are needed. Minnesota should not only act, but lead.