Gold Scams Prey on Fear

There’s no shortage of schemes and scammers trying to part older adults with their hard-earned savings, especially during the holiday season when people are a little more inclined to have generous and less suspicious spirit.  But recently, fraudsters are playing on political unrest and the threat of a recession to cheat older adults into buying gold and other precious metals at inflated prices.  

As with any scam, if something sounds too good to be true and promises a quick return on your investment, it’s worth taking the time to thoroughly investigate.  Many of these types of “get rich quick” schemes target older adults through the internet, emails or over the phone.   Gold, which according to Forbes is generally not a good investment, is often used by scammers who capitalize on the fear people have about the economy or the government.  However, there is no guarantee that gold will appreciate in value, it pays no dividend and if the world financial system collapsed, gold wouldn’t be anyone’s saving grace.  

Before investing in any precious coins, bullion or stocks in mining companies, the Federal Trade Commission advises buyers to ask for the melt value of coins, get an independent appraisal and consider other costs incurred by storing or insuring gold purchases.   Any pushy sales tactic that urges buyers to act quickly is more than likely a scam and should send up red flags.  It’s always a good idea to compare prices before making a purchase and consult with a reputable dealer.  

Some sellers deliver gold to a secured facility rather than directly to the buyers, this can leave consumers at risk for scams.  Be sure to validate that the metal exists, is the weight, content and purity described and is properly insured.  Buyers should always get a receipt for their purchase and understand the risk associated with buying precious metals; there is no guarantee that gold will increase or even maintain it’s value over time. 

Learn more about bullion scams and investing in gold and gold coins by following this link to the Federal Trade Commission’s Consumer Information page.