3 Common Gold And Silver Scams To Avoid!

For beginners inquiring how to get started investing in gold or silver, there is a lot to learn, and the internet can have a ton of conflicting information.

This conflicting information can make getting started investing in gold and silver extremely confusing. 

Where there is a lack of clarity, there are usually scammers lurking in the shadows waiting on unsuspecting victims. 

Whether you are new to buying gold and silver or a seasoned precious metals investor, here are three common gold and silver scams to be aware of and avoid at all costs. 

Celebrities & TV Ads

One of the most common scams is also the most subtle while still being in your face. 

You see an advertisement during your favorite television show or YouTube show featuring a prominent financial adviser, political talking head, or celebrity suggesting you buy gold and silver from them. 

They often promote some “special,” “rare,” coins that are supposed to be worth some extraordinary amount, prompting you to buy immediately. 

These are usually paired with storing in an Individual Retirement Account (IRA) through their exclusive deal. 

Here’s what they don’t tell you…

What they do not tell you is that these celebrities are getting paid large amounts of money to sell these products and precious metal IRAs to you.

That money comes out of YOUR POCKET as a result of rip-off level markups.

It does not come out of the company’s pocket or they wouldn’t have a business, and it certainly doesn’t come out of the celebrity salesperson’s pocket.

Additionally, most “rare” coins, commonly known in the industry as numismatic coins, do not have any extra value for most buyers. 

If there is one common woeful tale that plays on repeat in the world of precious metals investing, it is this… 

Someone — especially those new to buying gold and silver — buy some super expensive coins for their retirement account. When they finally go to sell the gold coins or silver coins, every buyer they approach will only give them the melt value for the coins.

The celebrity does not care. The advertising company doesn’t care. They got paid, and are likely retired off of the money you gave them long before you retire. 

If you want to avoid these predatory overpriced scams, do not buy from companies that advertise on television or ones that use celebrity spokespersons to sell the products. No matter how much you like that celebrity or how right they are on all other accounts.

DO NOT BUY FROM COMPANIES THAT USE A CELEBRITY AND TV ADS. 

What To Do Instead

Instead, buy gold and silver from a reputable online dealer that promotes gold bullion bars, silver bullion bars, gold rounds, silver rounds, gold bullion coins, and silver bullion coins. 

Bullion items are valued for their melt value, so you know what you are getting when you invest in these as opposed to speculative and subjectively valued “rare” coins and other overpriced items sold by celebrities and pushy salesmen.  

Corrupt Depository

A corrupt depository scam will first lure its victims in by enticing them with low-cost precious metal products to hold in their depository until the customer wishes to either cash out or have the metals sent to them directly. 

When the customer does request their metals, there will be major delays lasting weeks or months before any precious metal is delivered. 

Such corrupt depositories will give every excuse under the sun as to why there are delays. Examples of these frauds are First State Depository and Bullion Direct.

They may say there is something wrong in the supply chain, claim such delays are an industry-wide phenomenon, or that their policy requires a safety feature for banking purposes. 

What they don’t tell you is…

What they do not tell you is that they either don’t actually have the metals or they have a very limited supply. 

They are running a Ponzi scheme.

A corrupt depository may constantly be advertising to gain more paying customers, and they do everything they can to talk people out of cashing out or demanding their precious metals in a reasonable amount of time.  

When someone does cash out, a corrupt depository will hope it is a small amount of money they need to pay out so they can continue their juggling act. They usually have unreasonably long delays in sending the funds. 

These long delays are a telltale sign of their unscrupulous scheme. 

Whether buying or selling your gold or silver, there should not be delays even reaching into the amount of weeks. Instead, you should receive your metals or payment within a few days.  

DO NOT DEAL WITH DEALERS OR DEPOSITORIES THAT HAVE SUPER LONG DELAYS.

What To Do Instead

Before buying from an online precious metals dealer or storing your metals in a depository, it is important to research them to ensure that they are a reputable company. 

Look into Better Business Bureau reports that indicate long delays in shipping, processing, or payments. (Other than the BBB, few other review services are reputable.)

A reputable dealer will have a good rating with the BBB, and there will be very few if any complaints about long delays lasting in the range of weeks or months.

Failure to Deliver

This may be the most obvious to explain, but people still fall prey to such a scam quite often. 

Failure-to-deliver scams are when you pay for precious metal items such as gold, silver, platinum, palladium, or rhodium, in the form of bars, coins, rounds, ingots, etc., but never receive the items. 

This happens most commonly when people buy gold or silver from unknown sellers and suspicious websites lacking industry credibility. 

They will do everything they can to mask their operation as though they are legitimate and have many ongoing transactions while lacking a genuine reputation.   

What they don’t tell you is…

What they do not tell you is that they are just run-of-the-mill scam artists, con men, thieves, and fraudsters. 

Failure-to-deliver con artists are usually found creeping on the following:

• Recently built websites 
• Online bidding sites from users with no verified transaction history 
• Sellers who are based in a different country from the buyers
• Sites that masquerade as more reputable companies 
• Sellers who only want payments in cryptocurrency or cash

Such scammers will take your money and never send the precious metals you paid for. 

DO NOT BUY FROM UNKNOWN AND UNVERIFIED SOURCES.

What To Do Instead

Only buy from reputable online precious metals dealers that have verified transactions and are discussed by credible industry sources.

A credible company will likely have mentions in a wide variety of places with a well-established history of sales and purchases.