The Most Common Precious Metals Scams
Investing in precious metals can make for a sensible way to diversify your portfolio and provides a great hedge against economic volatility. During times of economic turmoil, even the big reserve banks entrust in precious metals for fear that finite currencies may fail them
As is the case with any kind of investment, however, it is essential always to be vigilant of the potential for scams.
Precious metal scams often involve convincing investors that they are buying genuine gold or silver at an unusually low price. Only does the investor discover that the metal they have purchased is either fake or much less valuable than advertised.
Throughout this article, we will discuss some of the most common precious metals scams so that you can stay alert and protect your valuable investments!
Fake documentation
Thanks to advanced technology, it’s never been easier for scammers to manipulate documents convincingly. This document manipulation enables scammers to use and reuse documentation almost endlessly. This is achieved through photoshopping signatures from one form to another, altering dates, changing descriptions, and other schemes.
Document manipulation allows scammers to reappropriate counterfeit documents depending on the gold scam. Among gold coins, the MS-70 grade is the favourite lure of fraudsters because many people want to own a ’mint-state’ coin. This can see scammers getting away with increasing the value of a coin by simply lying about its condition.
Untrained buyers may not always be able to discern the difference and may, therefore, unknowingly overpay for their purchase—often by hundreds of dollars.
Fake precious metals
Next up is the classic ‘fake gold scam’ - the most common scam of the lot. In this scam, the buyer gets what looks like the real thing. However, without a close examination, they cannot tell that the gold is not real. Later, when the buyer cautiously checks the structure, the coin's design, and most importantly, the coin's material, disappointment begins to set in.
In many cases, they will discover that the coin is not a precious metal but instead, several different cheaper metals melted together. This convincing amalgamation forms a blurred design roughly approximating an original precious-metal coin.
Partial delivery
This scam is relatively simple but very common, particularly if you buy gold online from unverified and unrecognised websites. A partial delivery scheme usually comes in two forms: The buyer pays for partial delivery of the gold, but the seller never delivers anything. The buyer pays a pre-agreed amount and gets a small part of the entire purchase. Once the buyer becomes convinced of the gold’s legitimacy, the scammer pays for the rest of the gold. Following that, the buyer never receives the shipment or a shipment of fake gold.
One way to prevent this is by running a simple background check on the online company before placing any order. You can place personal calls to their customer care service and check the validity of the office address online. Whenever possible, do not make advance online payments but insist on cash on delivery.
"Collectible" coins scam
Sometimes, you might want to buy gold coins for your collection with unusual and intricate designs, shapes, textures, or symbols. This is the exact scenario that some con artists are waiting for. Suppose you are just a neophyte collector of rare gold coins. In that case, there’s a very big possibility that you will be unable to differentiate a quaint, antique artefact from one that’s counterfeit or purely fictional. This could see you buying something under false pretences, being tricked into believing it is very valuable and paying ten times more than its actual worth. To decrease your chances of buying a fake coin, it’s best to consult a trusted expert before deciding.
Disappearing companies
This scam begins by convincing buyers that they can buy gold (usually at a lower price) before pressuring them to send money; another of the classic gold scams.
The supposed company will take the money but never send the agreed-upon product. The reverse side of this trick is to ask the seller to ship their gold coins, for which the purported buyer will never pay a cent. These con types often depend on how fast the fraudster can execute them, as they have to strike as quickly as possible to elude arrest. In this scenario, the only thing the victim will be left with is a voice message from the seller’s old number informing callers that the number is no longer in service and the company is no longer there. Following a successful job, the con artists normally shift their operations to another location and change their names.
Coins that don’t exist
Next in our list of gold buying scams: the non-existent coin. As unimaginable as it may seem, some cunning dealers transact not in fake gold coins but in coins that don’t exist at all. The ruse is to convince the buyer that it’s very risky to keep a large amount of physical gold in their homes or offices - that there’s “always the danger of theft or exposure to disasters like fires and floods”. Of course, these players have a ready solution: an ideal place to store a bulky coin collection. These dealers conveniently volunteer to keep the coins in escrow to avoid such risks. The bigger problem is, of course, that the buyer does not get to see his gold, obviously because there never was any in the first place. To add insult to injury, these cons will collect a storage fee and insurance from the buyer for the imaginary gold coin collection. These extra fees add more salt to the wounds of victims of fake coin fraud and make the con seem just that bit more legitimate.
Inheritance scams
This common scam and its variations became popular on the internet - and has cost people millions of dollars since its conception. One example involves a scammer pretending that he has just inherited money or gold. They then state they need a partner, a bank account, and some bribe money to move their inheritance out of their country. They will offer their new ‘business partner’ half of the total wealth as remuneration. By the time the victim realises that there is in fact, no inheritance, they’ve already given the money to the ‘poor and helpless’ fraudster. Another popular scam preys on lonely women through con artists befriending them and promising to visit them in their country, but first, there’s ‘something the victim must do’.
One example is the scammer pretending that someone stole their wallet while on the way to the airport, requiring cash or gold to pay for their ticket, hotel, and all other expenses. Even after the initial con, these fraudsters will continue to milk their victims as long and hard as possible.
These scams can come in different variations, but they all prey on greed, loneliness, sympathy, or just the temptation to earn a quick buck. The scammers will always promise that they are legit and pledge to give only good things to their intended victims.
Excessive shipping costs
One common scam that you might already be familiar with from regular online shopping is excessive shipping costs. This could see you stumble upon a really tempting offer on a website selling gold at a promotional price (that seems almost too good to be true), but don’t be too quick to click – do some investigating first! It could be a legitimate website, and the offer could look reasonable enough, but the catch is the whopping shipping costs that are slapped on top by gold scammers at the check-out stage. You could argue that seeing as it’s an online sale, shipping is part of the cost.
So what’s all the commotion about? Well, what if you were to find out that the shipping cost is double the price of the gold they sell? Often, this information will be withheld from the buyer. The fine print will just say that the shipping cost varies and increases according to the amount of gold you bought.
Invest with confidence
At the end of the day, the most secure way to avoid being conned when purchasing your precious gold or platinum is to make sure you’re buying through a tried and trusted dealer. Doing a little research beforehand can save you a lot of heartache down the line, which is something we’re sure you want to avoid! Of course, you could always purchase your gold or platinum from us here at 7879. Our transparent and trustworthy pricing ensures buyers always get the best price for their 24-karat gold or pure platinum jewellery. Our prices are constantly updated to correspond with the live market rates. The heightened purity of your 7879 jewellery allows you to track its worth according to the live market rate at any given time. This makes your glamorous jewellery item a precious investment that you can wear for the world to see.
