How to Not Get Scammed on Gold
Gold can provide a reliable way to secure your financial future, but you must remain wary of potential scams when purchasing it.
Scams involving retirement accounts or unrealistic promises should always be avoided, and high-pressure salespeople should always be avoided – genuine gold dealers will take time to explain everything thoroughly and take their time answering your questions about the details.
Avoid High-Pressure Sales
Pressured or disinterested dealers that impose too many sales fast are red flags; if you feel rushed or anxious during this process, leave.
Be wary of gold salespeople who claim they possess inside information regarding future market trends or guarantee your investment will remain safe if there is economic instability; such dealers are most likely not reputable dealers.
Some dealers attempt to attract customers by offering gold coins that hold historical or numismatic value as well as bullion-grade metal content at significantly marked-up prices, such as those sold by Goldline International at 69% above their melt value (such as French 20-franc “Rooster”) coin sales. When selling your gold, find a buyer with good customer reviews who is fair in its treatment; many online buyers provide prepaid mailers and fast appraisal and payment.
Look for a Reputable Dealer
When purchasing precious metals, seek a dealer with a record of providing outstanding customer service. Dealers that prioritize customer education over high-pressure sales tactics may have your best interests at heart.
APMEX recommends searching for dealers that offer multiple payment methods, including credit cards, bank transfers, PayPal and check. In addition, look for dealers with insured methods of delivery or storage to protect your investment.
Be wary if a gold dealer promises you an IRS approved Gold IRA; this could be an indication of Ponzi scheme fraud. In such schemes, new investors pay off older ones using funds generated from new investments rather than genuine profits and could lead to its collapse.
Don’t Buy Gold Online
Gold is an invaluable commodity, but trading it for gas or hand sanitizer at your local grocery store may lead to scamming schemes.
Before purchasing anything from a gold dealer, it is a wise idea to conduct some due diligence on them. Check their longevity as a business and any online reviews.
Be wary of dealers who claim to offer fake Gold IRAs or who make unrealistic promises about tax-free benefits, and always check with either your IRA custodian or dealer before believing any claims about their services made by these sellers. It’s also important to keep in mind that selling gold can be more complex than reselling stocks or mutual funds.
Don’t Pay Upfront Fees
Be wary of dealers that require upfront fees when purchasing gold; this could be a telltale sign they’re trying to con you out of money. Furthermore, any offer only available for a short while should raise red flags; do your best to stay away from such dealers altogether.
Scam artists take advantage of fear and greed by employing high-pressure sales tactics that prey upon both. For instance, they might claim there will be a financial collapse and that gold investments provide safety, promising huge profits without risk.
Another prevalent scam involves selling “fake” bullion coins. While these coins may appear genuine, they’re actually not real and may even have significantly lower values compared to real bullion coins.
Don’t Buy Gold From Someone You Don’t Know
Gold is an investment, so it must be stored safely. The main risk associated with your gold investment is someone stealing it; to protect your investments effectively and avoid theft it’s best to store it in multiple places or with an organization offering secure storage such as a safe deposit box at a bank.
Some dealers engage in bait-and-switch tactics by advertising gold bullion and then selling coins with historical, or numismatic value – these coins often add little additional value over their “melt” value – usually just the amount of gold present.
Another option for investing in gold can be buying exchange-traded funds (ETFs) or physical gold from a reliable dealer, though make sure that it fits into your portfolio properly and understand all associated risks before committing.