Buying gold is an investment. When you buy gold, you own a commodity that has high liquidity and great profit potential. The rate on gold is always rising, so you can rest assured of the profit margins and the security of having something solid to own, rather than paper currency, which is always fluctuating. Owning gold is a solid foundation for wealth insurance.
Unfortunately, there are those who would weaken the system and prey on people who may be ignorant of gold-buying scams. Our brokers are always happy to help you buy and sell gold, but we also pride ourselves on educating our clients so they don’t fall victim to those who would take advantage.
The most vulnerable targets of any scams tend to be seniors. This demographic may not know how to separate fact from fiction on the internet. Plus, they’re more likely to pick up the phone even if their caller ID doesn’t recognize the number, and they’re always looking to supplement their retirement savings. However, anyone can be hoodwinked if they aren’t careful.
Here are five gold-buying scams we’ve seen and how to avoid them.
They want to sell you gold—but it’s fake.
A common swindle, this scam is easy to set up if the buyer doesn’t know how to check to see if it’s real. The gold may come in the form of coins, and it’s common to see scams where fraudsters will inflate standard coin values. They may also make false or misleading claims regarding the quality or rarity of these coins or make claims about the state of the economy to lead their targets to buy up everything based on the fear that a new economic collapse may occur.
Simply put, when someone tries to sell you gold, make sure you (or an expert) look closely at the materials they’re selling. The design of the coin or the material may be imperfect, and you may end up spending your savings on pretty-looking trinkets. If you ask about the seller’s buy-back policy, you may be able to determine if it’s a scam right then as well. A legitimate gold dealer will know the real value of the piece in question and will be up-front about the return process.
They sell you gold—but not as much as advertised.
This one is called a “partial delivery scam” and has some variations. In one instance, you’ll pay for a partial delivery of the gold. Then the fraudster never delivers anything.
In other cases, they may deliver a small portion of gold. Once you’ve verified that it’s real gold, you pay them the full amount—and then they disappear with the rest of your money.
In a third variation, they send you a small portion of gold, and once you’ve verified it’s real, they deliver the rest of the gold, except it’s fake. The best way to avoid this scam is to buy your gold in-person or through an affiliated broker so that you’re better able to determine if the gold is legitimate.
They sell you gold and a place to store it—but neither the gold nor storage place exists.
This one is particularly heartbreaking. Maybe a fraudster has convinced people to buy a large number of gold coins and has also convinced them keeping those coins in their home or office isn’t safe. After all, it’s a large collection and may be difficult to hide. Conveniently, they have a storage facility where they can keep these coins safe for you. So not only are they selling you these coins that probably don’t actually exist, but they charge you for storage and possibly insurance.
To avoid this scam, ask for their company name so you may check with the Better Business Bureau. You can see how long they’ve been a member and find ratings and reviews to investigate. Another way to avoid this one is to make sure you have your gold in-hand before you find a place to store it.
They sell you gold with altered documentation.
In this day and age, information is at our fingertips, and it can be supremely helpful for research and to connect with those who can buy and sell our gold. However, it also means that it’s extremely easy for fraudsters to alter documentation on gold shipments. They may sell you gold that’s in fact not at all worth what you think it is. Make sure to do your research on prices and procedures. Not knowing the difference, you may be overpaying a scammer.
They’ve inherited gold and need a business partner
Unfortunately, this one catches a lot of single people who have made a friend online who turns out to be a fraudster. You may also be a target of an inheritance scam if you receive an email or a letter from an estate locator informing you have an “unclaimed inheritance.” The scammer will say they need money to help release the inheritance or to move it to another country, promising they’ll pay you, their faithful partner, back when the money is available to them.
Sometimes there may be an actual inheritance, but it will end up being less than the amount you have already paid to the scammer. In some of the more elaborate schemes, there may be more than one scammer involved—one or two may pose as a tax agent, lawyer, or a banker to convince you the claim and the gold is legitimate.
To avoid this gold-buying scam, be wary of fees. Law firms and executors of wills aren’t legitimate if they request money from you in order to view documents about estates. Make sure you also recognize the name of the individual who left you the inheritance. If you don’t recognize the name, they may be playing you. Give it some time before you commit anything. The scammers may realize that you’re not a good target and go on their way.
Of course, the best way to ensure that you won’t be scammed is to work with a trusted gold broker that knows the ins and outs of the industry. That’s where we come in. If you’re interested in maintaining your wealth security and increasing your financial readiness, contact Swiss America today. We look forward to answering your questions.