It is a common belief that during uncertain economic times, gold and precious metals are a sound investment. As gold prices rise, the number of gold scams rises as well. That’s because all that glitters is not gold.
If you are considering investing in gold or other precious metals, it is imperative to do proper research. Be sure to familiarize yourself with the following scams to ensure you don’t become the next victim.
Types of Gold Scams
The fake gold scam appears to be the most popular choice in the criminal’s arsenal. An unwitting buyer, new to the trade, receives what appears to be real gold. Closer inspection by an expert however reveals that what was thought to be gold is in fact fake.
Advances in computers and technology have made it a lot easier for scammers to manipulate documentation for their criminal benefit. Signatures, stamps, descriptions and dates can all be manipulated to create authentic looking certification.
Unskilled eyes may not recognise that the product and its certification are not the real deal.
With this scam, there are two two methods that criminals use to defraud their victims:
- The purchaser pays for a limited delivery of gold to inspect and nothing is delivered.
- The purchaser pays a small amount for a portion of the order. Once the purchaser affirms the gold’s legitimacy, the purchaser settles the full amount. Delivery of the order either contains fake gold or the scammer doesn’t bother to send the goods.
The Inheritance Scam
This elaborate scheme involves a scammer who pretends he has just inherited a large sum of money and/or gold. The scammer goes on to suggest that he needs a partner to assist with moving it out the country. To do so he requires a bank account and some money as an incentive to get the inheritance abroad. As a reward, the scammer is willing to part with half the inheritance. However, before the victim realizes this is all an elaborate scheme, the scammer has jumped ship with the money. For more information, see our page on Inheritance (“419”) Scams.
Collectible Gold Coins
The identification and collection of rare coins attracts millions of enthusiasts worldwide. Those new to the trade will find it difficult to differentiate between a genuine artifact and a counterfeit. These are the victims that scammers prey on. If you don’t have your wits about you, you could end up purchasing something under false pretenses. Worse, you could pay significantly more than its actual worth.
Coins That Don’t Exist
There are certain scammers that are so brazen that they often trade in coins that don’t exist. The idea is to convince their victims of the risks in holding large amounts of coins or gold at home. Rather, they should store the coins or gold in secure monitored premises that the scammer offers as a service. The problem however is that the coins and security facilities are fake and do not exist. In addition, the really crafty scammers may even charge a holding fee and insurance for the victim’s imaginary purchase.
Over-Inflated Shipping Costs
You may stumble upon an official website with bargain prices for this precious commodity. The catch however comes when it is time to check out and you’re hit with an exorbitant rate for shipping.
Operators will do their best to disguise shipping costs and other related fees until the last moment. The fine print might advise that costs for shipping fluctuate according to the amount of gold purchased. By this time you have already invested so much time attending to other due diligence pertaining to your purchase that you gloss over this critical detail.
How To Protect Yourself From Gold Scams
There are a number of strategies that gold experts advise to mitigate the chances of getting scammed. First, ensure you trade with established, reputable dealers. Second, familiarize yourself with the Financial Industry Regulatory Authority website where broker licenses can be verified. Third, do your research – online reviews can give excellent, honest advice on a particular broker. Finally, identify dealers in similarly recognized products with a proven trade and business track record.
If you think you are the victim of a gold scam, contact the fund recovery experts at MyChargeBack.