Gold IRA Scams

Gold IRA Scams | Avoid Getting Swindled of Your Hard-earned Money

Diversifying your portfolio by opening a gold IRA is a good thing. After all, there is a lot to benefit from investing in precious metals.

However, if you are inexperienced in handling physical gold and other precious metals, there is a period during which you will be learning more about the industry.

This is the time when you are exposed to a lot of risks from unscrupulous precious metals dealers who run gold IRA scams.

A lot of would-be investors have lost their money by falling victim to such gold IRA scams at the hands of a fraudulent precious metals dealer, but you do not have to be one of them!

This article will provide you will all the information you will need to safely make an IRA investment in gold assets.. Read on to find out the best way to handle gold investments.

Open a Precious Metals IRA With a Trusted Company

  • If you get past the first hurdle by choosing the right gold dealer to work with, you do not have to worry about any gold IRA scam.

There are many reputable companies out there to choose from, such as Augusta Precious Metals, if only you take advantage of resources such as the internet to do proper research.

However, the dealers who run gold scams are well aware of the need to appear as trustworthy and legitimate as possible.

They employ all sorts of tactics to try and fool gold investors into either get them into gold IRA funds or just deceive them all together.  

For this reason, I’ve created a list of companies I have personally VETTED.  I chose Goldco for my hard earned savings.

If you want to avoid being one of the many investors who end up with useless counterfeit gold coins or a non-existent gold IRA account, remember the following:

  • High Ratings Can Be a Red Flag

Most common scams involve the publishing of false reviews on Google which praise the gold dealer in ways meant to convince people that they are not part of a gold IRA scam.

This means simply reading a few ratings online from total strangers does not constitute due diligence in any way.

High ratings without any negative thing being said about the gold IRA company should actually serve as a warning to you.

To be safe, look for genuine reviews from trusted sites, such as the Better Business Bureau or Business Consumer Alliance.

These sites are always on the lookout for gold IRA scams, so if a company has a good rating here, likely, they are indeed legitimate.

  • The Celebrity Hook Is a Common Scam

A lot of gold IRA scams also use the celebrity hook tactic to fool investors into believing that they have come across the investment of a lifetime.

What you should understand is that these celebrities are paid to endorse a lot of products, some of which they know nothing about.

Is liking an actor, musician, or sports personality enough to lead you to buy thousands of dollars worth of bullion coins from any random company? The answer should be no!

Celebrities are not gold IRA dealers, and as such their endorsements should not be enough to persuade you to open gold IRAs with companies you are not familiar with.

Despite having celebrities, the top two companies can be seen pitted against each other here. I invested with Goldco, but here’s what they look like next to Augusta:

Fraudulent Gold IRA Companies Exist

The precious metals market is a highly lucrative one and the lure of making a quick buck attracts many naïve gold investors. Scammers know this, and as such, gold IRA scams happen every day.

What is surprising is that these companies have used the same tactics over and over again but investors keep falling for them.

In most cases, companies that run gold scams usually employ two common methods, which are:

  • Fake Coins or Bars

If you do not have experience handling physical gold or silver, it is very easy to be tricked into buying fake gold and silver coins.

Fake bullion coins are usually created in the following ways:

  • Different metals are mixed with the gold to create a much less valuable alloy

  • A cheap metal is coated with very little gold leaving the buyer with a low-value coin

  • The valuation scam in which a gold coin’s value is overestimated above its actual value

  • Some metals are similar to gold in both weight and appearance, making it easy to trick inexperienced investors.

The worst-case scenario, however, involves being sold coins that do not even exist. Of course, you may be thinking that there is no way you would fall for that trick. However, unfortunately, a lot of investors have been duped that way.

A determined and false gold IRA dealer usually knows the right things to say to convince people of the “benefits” of paying beforehand for products they have not seen yet. A combination of false high ratings, the celebrity hook, and using sophisticated terminology is usually enough to do the trick.

  • Too Good To Be True

Whenever you set out to buy gold, always remember that although there are a lot of benefits to be had by investors, this is not a place to make quick money.

An individual retirement account is usually a long-term investment, so the moment you start being offered deals with quick returns your alarm bells should go off.

If it seems too good to be true, it usually is. Only a Ponzi scheme would make outrageous offers, such as doubling your investment portfolio in a very short time. Real gold IRAs require patience and proper management before you realize any profits.

In some cases, you may think you have landed a good deal only to be charged expensive delivery fees or receive partial deliveries of your products.

Some investors have been shocked to discover that the companies they were doing business with actually do not exist, meaning they have opened fake precious metal IRAs. It is always important to insist on visiting the precious metals firm before handing over any money.

Tips To Avoid Gold IRA Scams

Tips To Avoid Gold IRA Scams

It is surprisingly easy to safeguard your investment from gold IRA scams by paying close attention to important details whenever you are purchasing gold bars or coins from unknown gold dealers.

The following are some of the tips you can use each time you go out to purchase gold:

  1. Avoid Pushy Sales Pitches

High-pressure tactics are usually used by scammers to convince their victims not to miss out on the so-called “great opportunity” they are being offered. You should not be frightened into believing that you are missing out.

The price of gold will rise, of course, but not so fast that you hardly have time to stop and think things through. A few days of researching the company and the offer will go a long way in helping you avoid what is likely to be a Ponzi scheme.

  1. Watch Out for Shaved Coins and Bars

Gold coins are valued according to the amount of gold the coin is made of and its purity. Due to the high price of gold, even a few grains can cost a lot of money. This is why many dealers of counterfeit coins sometimes shave off a few grains from each coin they sell.

Imagine how much money you stand to lose if you purchase a whole batch of such coins!

It is very difficult to tell when some gold has been shaved off, especially when dealing with a professional criminal. To be safe, stick to reputable dealers who work with honesty and transparency.

  1. Read the Contract!

In this day and age, reading the contract carefully should be something every investor does every time they make a purchase. A lot of time, company offers have some hidden fees that may be found only by carefully reading and understanding the contract.

  1. Avoid Rare Coins and Collectible Coins

Many rare coin valuation scams use collectible coins to dupe investors into thinking they are buying very valuable bullion coins when in actual fact the coin might only have a commemorative value far less than what they paid for,

Collectible coins are also not eligible for inclusion as part of your IRA gold, so if you are in the process of trying to diversify your retirement accounts, stay far away from these coins.

  1. Confirm the Gold Deposit

After the gold has been purchased, it is the responsibility of the IRA custodian to handle the transport of your precious metals to an approved depository.

You should demand not only your proof of purchase but also the relevant documentation showing that your IRA investments have been securely stored.

  1. Stay Clear of Bogus IRAs

If you see any warning signs that the IRA custodian you are about to work with is not what they claim, run away fast.

There are so many reliable IRA companies out there that there is no need to stick to one that seems fake or untrustworthy. A quick visit to the Business Consumer Alliance page will show you which companies are safe to work with and which ones are not.

Victim of Precious Metals Investment Scams?

If you think that a precious metal dealer may be fraudulent you should try to report it to the relevant authorities, such as the Commodity Futures Trading Commission. They are responsible for protecting investors from fraud, manipulation, and abusive practices.

You can also try to contact various state and federal regulators in one of the following ways:

  • Contact your FBI’s local field office and ask to speak to the state attorney general’s office

  • Go online and report to the Internet Crime Complaints Centre IC3

  • Report the matter to the Federal Trade Commission

Final Word

Gold and silver provide one of the safest means of securing your retirement savings but, just like the stock market, there is a chance you can lose money if you are not vigilant.

The industry is full of con artists who will try to swindle you of every cent you have. If you want to avoid becoming another statistic of the many gold IRA scams happening out there, use the tips outlined in this article to help you to make better investment decisions.

5/5 - (2 votes)
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.