In times of economic turmoil like the present, you've likely heard numerous experts emphasize the value of turning to precious metals like gold as a wise investment strategy.
Gold stands out as an exceptionally dependable asset, displaying resilience in the face of financial uncertainties.
Even as the stock market tumbles, akin to an elevator lacking functional brakes, the price of gold continues to ascend. Think of gold as a safeguard against financial hardships.
These unsuspecting victims have parted with their hard-earned money without even a glimpse of the precious metal. While investing in collectible coins is acceptable, cautious discernment must be exercised in such transactions.
Counterfeit or Fake Gold Coins
Among gold coins scams to avoid, this ranks at the top. The purchaser is presented with an item that outwardly resembles genuine gold, and unless subjected to meticulous scrutiny, its falseness remains concealed.
Yet, upon a meticulous analysis of its composition, the intricacies of its design, and particularly the materials employed, the veil of deception unravels.
What was initially assumed to be a solid gold piece reveals itself as an amalgamation of disparate metals, melded haphazardly to mimic the appearance of an authentic gold coin.
In this era of advanced technology, swindlers possess the means to easily manipulate various documents, enabling them to exploit and reuse paperwork ceaselessly.
Through tactics like photoshopping signatures from one form onto another, altering dates, and modifying descriptions, you can detect counterfeit gold coins.
False or Fake Documentation
Within the realm of precious metals coins, the MS-70 grade stands as a prime target for the machinations of fraudsters.
This preference is rooted in the widespread desire for possession of a coin in a "mint state."
As a result, scammers capitalize on this inclination and deceptively enhance the value of a coin by providing false information about its condition.
Partial Shipment Deception
This gold buy scheme is straightforward yet remarkably prevalent, especially when acquiring gold through unverified and obscure online platforms. The partial shipment scam typically manifests in two variations:
The purchaser remits payment for a partial gold delivery, only to receive nothing from the seller.
The buyer makes an initial payment as agreed upon, receiving only a fraction of the total purchase. Once the buyer is convinced of the authenticity of the gold, they proceed to make full payment for the remaining quantity.
Unfortunately, the subsequent shipment never materializes, or what arrives is a consignment of counterfeit gold.
It is advised to perform a comprehensive background assessment of the online entity before initiating any purchase. It is also advised to call customer service and ensure the company is legitimate.
Whenever feasible, avoid making advance payments online and instead advocate for cash on delivery as a safer payment method.
Consider, for instance, a 2002-W $50 Gold Eagle. While a coin graded at MS-60 boasts a notably clean state, albeit not perfect, its market value would hover around 30% lower than that of an impeccably pristine MS-70 grade coin.
The Disappearing Business Scam
Another popular gold coin scam to avoid. In this gold IRA scam, buyers are persuaded to purchase gold, often at a discounted rate, and are coerced into sending money upfront.
However, the so-called company will pocket the funds without delivering the promised product. Conversely, scammers might entice sellers to send their gold coins, only to vanish without making any payment.
The Inheritance Deception
One popular Gold IRA scams, along with its various iterations, this has gained significant traction in gold IRA investment, causing people to lose millions to these swindlers.
For instance, one variant involves a fraudster posing as an heir with a substantial fortune in money and gold. They seek a partner, a bank account, and a bribe to facilitate the transfer of their inheritance abroad.
The allure is an offer of half the wealth. Regrettably, victims unknowingly surrender their funds to these seemingly "needy" scammers before realizing the inheritance is non-existent.
Collectible Gold Coins: Beware of Counterfeit Risks
When seeking unique gold coins to enrich your collection, you may be drawn to captivating designs, intricate details, and distinctive symbols.
However, this allure is precisely what certain fraudsters capitalize on. As an aspiring collector of rare gold coins, distinguishing between authentic antiquities and fabricated counterfeits might pose a significant challenge.
Unwittingly, you could fall victim to false representations, investing in what appears to be a valuable artifact, only to realize later that it holds minimal worth – resulting in an overpayment by a substantial margin.
Nonexistent Coins: A Deceptive Scheme
Remarkably, certain shrewd dealers engage not in counterfeit gold coins, but in coins that are entirely fictitious.
Their tactic revolves around exploiting the perceived risks of safeguarding substantial physical gold holdings at home or office due to theft, fires, or floods.
Offering a solution, they propose secure storage for sizable coin collections.
These dealers offer to store the coins in escrow to mitigate risks, yet the underlying issue remains: there is no actual gold.
Adding insult, these deceivers impose storage fees and even demand insurance payments for an entirely imaginary gold coin collection.
Exorbitant Shipping Charges: Unveiling the Trap
Should you encounter an enticing offer on a gold-selling website boasting promotional prices, exercise caution before hastily clicking.
While the deal may seem legitimate and reasonably attractive, a significant snag lies in wait: an exorbitant shipping cost that remains concealed until the checkout phase.
One might argue that shipping is inherently linked to purchasing gold coins, but the concern arises when this expense dwarfs the gold's price.
Concealed from the buyer, the fine print vaguely mentions variable shipping costs pegged to the gold's quantity, often resulting in shipping fees exceeding the gold's value.
Key Takeaway
Regrettably, these gold buy scams persistently evolve, employing both the mentioned tactics and innovative approaches to deceive individuals.
On a brighter note, ample strategies exist to unmask these gold scammers (refer to our guide on evading gold-buying scams).
Shielding oneself from these perpetrators necessitates vigilant research, meticulous assessment of crucial gold particulars, and exclusive engagement with established, trustworthy gold dealers.
About Tim Schmidt
Tim Schmidt is an Entrepreneur who has covered retirement investing since 2012. He started IRA Investing to share his expertise in using his Self-Directed IRA for alternative investments. His views on retirement investing have been highlighted in USA Today, Business Insider, Tech Times, and more. He invested with Goldco.
