How to Avoid Gold and Silver Scams Online

If you’re reading this right now, it’s likely because you realize silver and gold are in high demand. Between inflation, economic fears, and changes in production, precious metals have quickly become a favorite investment among novices and experts alike.

Unfortunately, this makes it difficult to find fair prices. And when trying to avoid high premiums, many people fall for gold and silver scams online. Occasionally, this means acquiring bullion with no chance of profiting. In worst-case scenarios, though, someone could lose their life savings.

Precious metal scams come in many shapes and sizes, and some nefarious tactics even remain legal. This guide will help you identify potential scams and provide steps to ensure your bullion purchases are both legitimate and a solid investment. This is the only right way to invest.

Are Gold and Silver Scams Really a Problem?

We live in a world where many threats get overblown to increase ratings, so is it possible that scams involving gold and silver bullion fall into this category? Unfortunately, this isn’t the case. The problem is hard to quantify since it often goes undetected, but experts believe it’s massive.

A single gold and silver scam undertaken by two Los Angeles men, for instance, stole more than $185 million from unsuspecting investors. There were victims in all 50 states, and most of them bought bullion coins for wildly inflated prices.

Unfortunately, this isn’t an isolated occurrence. These fraudulent activities increase in frequency as the value of gold and silver rises, and as you can tell from precious metal price charts, that’s exactly what’s happening. These scammers seem to target specific individuals:

• Adults over the age of 60.
• Inexperienced gold and silver investors.
• Young adults — who lose more to fraud than the elderly.
• Socially isolated individuals.

People in these groups are prime targets for gold and silver scams online. Research also shows that the most common type of fraud experienced by people 45-54 years old is investment fraud. Scammers unfortunately know who they can take advantage of, and they’re very good at doing so.

This shouldn’t dissuade you from investing in precious metals, though, since there are many safe ways to do so. Whether you want to buy gold bullion bars or invest in other types of precious metals, the trick is knowing exactly what you’re getting into. The rest of this guide will help you do that.

Types of Gold and Silver Scams Online

We’ll discuss actionable steps you can take to avoid gold and silver bullion scams online later in this guide, but it’s most important that you’re able to identify instances of fraud. If you can recognize potential scams as soon as they surface, your risk of getting taken advantage of decreases.

The following common online gold and silver scams have affected millions, but you don’t have to become part of that statistic. Once you’ve reviewed these, though, you’ll see how sophisticated fraudsters have become. Having this knowledge will give you a fighting chance.

Counterfeit Items

One of the most frequent scams you’ll encounter online is counterfeit gold. Pictures on the internet make it difficult to examine bullion, so you could purchase an item and not figure out it’s fake until much later. Avoiding discount (e.g., Wish) and auction (e.g., eBay) sites can minimize this risk.

Advertising Coins as Rare

If you’re looking for rare gold items or silver collectibles, there are plenty of choices out there. Unfortunately, many gold and silver scams involve legitimate precious metals advertised as rarer than they actually are.

If a fraudster can convince someone that a 1-gram bar of gold is so rare that it warrants a price 10 times above spot value, they’ll walk away with a significant return. Unfortunately, the investor will probably never see a similar profit on their end. 

Fake Documentation

While scammers will try to convince investors that regular bullion coins are rarer than they are, the fact remains that coins do exist that are more valuable due to rarity. When this is the case, though, there should always be documentation available.

Unfortunately, many gold and silver scams online start out with fake documents. Through Photoshop or even photocopies, it’s possible to claim that a coin with an MS-60 quality grade actually has an MS-70 grade. This can increase the price by 10% or more.

The ‘Empty Vault’ Scam

Online scammers have even discovered a way of making money off precious metals without ever delivering a product. They’ll promise safe storage in high-security vaults after their target agrees to a purchase. In reality, the vaults and even the precious metals rarely exist.

Specialized IRA Scams

One online gold and silver scam that occurs frequently — because it’s a legal gray area — relates to specialized individual retirement accounts (IRAs). Scammers contact targets either online or on the phone and tell them that the government may confiscate their savings in a recession.

This obviously scares the target a bit, but the “kind” salesperson informs them they can protect their money through a specialized IRA. The target only needs to buy bullion — at inflated prices — that can then get stored in the IRA. With this gold and silver scam, the IRA drops in value almost immediately.

CFTC Fraud Advisory

These gold and silver scams have become so prevalent that the Commodity Futures Trading Commission (CFTC) issued a fraud advisory. This is a major step only taken when collectors and investors are in significant danger due to fraudulent activities.

The CFTC fraud advisory covers a variety of subjects, but the most important center on signs you should watch out for. If you receive an unsolicited message online — be it via email or social media — a red flag should already pop up in your head.

If you experience any of the following situations with sales pitches, you can almost guarantee that an online gold or silver scam is playing out before your eyes.

• Insistence that major news events (e.g., disasters) that are already public knowledge mean you could make money off precious metals.
• The salesperson identifies themselves as a “merchant” or “metals dealer.”
• Requests for personal information such as name, email, phone number, or address.
• Guarantees of profit.
• Offering quid pro quo (e.g., “If you buy now, I’ll reduce my commission”).
• Building up a false sense of urgency (e.g., “It’s important to act now because…”).
• Offers to help you take out loans to cover the price of gold or silver.
• Agreement doesn’t list financial institutions, storage locations, or important documentation.
• Strangely complex purchasing processes (e.g., “If you pull your money from X and transfer to Y, we can…”).

The CFTC lists these as some of the biggest red flags of gold and silver scams both online and offline. If you’re contacted and any of these warning signs show themselves, don’t let salespeople convince you that you’re missing out on an opportunity.

In reality, profiting from precious metal investments doesn’t mean draining your retirement account or “acting now.” If you’re contacted by a salesperson and become interested in investing, cut off communication with that individual and do a little research of your own.

If you’re still interested in buying precious metals after that, avoid gold and silver scams by using a reputable firm like Silver Gold Bull.

Avoiding Bullion Storage Scams

This guide briefly touched on scams related to bullion storage, but this issue is so prevalent that it deserves more attention. This fraudulent activity also warrants additional mention due to its absolute brazenness. Offering gold that doesn’t even exist to investors is beyond disgraceful.

Even though gold and silver scams online often start out with the promise of storing gold, keep in mind that this issue is only so prevalent because precious metals storage is a legitimate service.

To ensure you’re working with a real storage company, though, always check the following issues:

• The service can show they have insurance for your gold and silver.
• Storage facilities undergo audits to ensure they have what they claim.
• Allocated storage offered through reputable precious metals dealers.
• Dealers shouldn’t charge additional fees to ship your items to storage.
• You can access or sell your precious metals at any time.

Each of these are positive signs, but the only way to avoid gold and silver storage scams online is to deal directly with reputable dealers. Silver Gold Bull has tens of thousands of customers, and you can do everything from purchasing bullion to storing it directly through our service.

We’ve seen what these scams do to people, and we’re here to ensure it doesn’t happen to you.

Don’t Fall for Gold and Silver Scams Online

Now is an exciting time in the precious metals world, and even those who never invested in gold and silver in the past have come around to it. Whether you’re a seasoned investor or part of the new wave, though, it’s imperative that you take concrete steps to avoid scams.

The smartest decision you can make is buying coins and other forms of bullion from reputable dealers. Because when you come across deals that are “too good to be true,” that’s typically exactly what they are. At Silver Gold Bull, we’re here to help you avoid gold and silver scams.

Visit our Precious Metals Homepage to see our wide selection of silver and gold bullion products. You’ll find just about anything you can dream of, all with the comfort of knowing your purchases are guaranteed and protected.