If you’re interested in buying gold coins, there are some things you need to watch out for. There are some common design tricks that gold investment scams use. These include photos of expensive products and fake quotes. These are easy to create and should not be taken as a sign of trust. It’s also important to look for a real physical address.
There are several ways to avoid gold investment scams, including being cautious of cold calls from unscrupulous companies. These companies often make false claims that may be hard to verify. They may also use inflated claims about the amount of gold reserves in their mines. For example, the Securities and Exchange Commission recently took legal action against a Florida mining company that falsely claimed that its Ecuador mining project contained gold reserves worth $1 billion.
Many scams target consumers seeking investment opportunities online. They may advertise their products and services on social media platforms or on search engines such as Google. Unlike regulated firms, these firms are not regulated or authorised by the Financial Conduct Authority. Unregulated companies usually sell high-risk investments that are not suitable for retail investors. Additionally, many of these firms may advertise their products and services through emails, word-of-mouth, and even at trade shows and exhibitions.
Unfortunately, not all gold investment scams are fraudulent. However, it is important to avoid scams that rely on the safe and sound image of gold. Be wary of unsolicited offers claiming to offer lucrative investment opportunities, or if you receive unsolicited calls from an unknown number of people. Oftentimes, these unsolicited offers do not disclose the fees or commissions they charge.
Claims that seem too good to be true
When it comes to gold, there are many investment scams out there that claim to be too good to be true. Some of these companies use phony interest rates or do not store their metal in a reputable facility. Others fail to point out that they can charge you additional fees if the price of gold or silver changes. Fortunately, there are some easy ways to protect yourself from scams involving gold investments.
One common gold investment scam involves trying to bamboozle victims with jargon and pressure them into making decisions without fully researching the products and companies. In this classic investment scam, the victim is initially hooked on a product but is later sold a far inferior one. For example, the scammer may advertise a popular gold coin for a reasonable price, then change to a more exotic one while on the phone. It’s important to take your time and find the facts elsewhere.
Another common scam involves false testimonials and online reviews. Some scammers will pay people to post fake testimonials or appear in video ads that make unrealistic promises. While some of these testimonials may be legitimate, others are simply phony. Make sure to check the source of any emails you receive, and never click on ads or links in them. Instead, do your own research on the company or search for reviews online.
A class-action lawsuit was recently filed against several companies that falsely marketed expensive coins as safe investment vehicles. The coins were sold by dealers at marked-up prices, sometimes up to three times their market value. The FTC alleges that these companies misled investors by using exaggerated claims about their value and investment risks to lure people into buying their products.
Fraud activity usually follows the value of precious metals, and when gold and silver prices plummeted in 2014, reports of precious metals scams decreased. According to a 2014 report by the U.S. Senate Special Committee on Aging, more than 10,000 Americans were victimized by precious metals scams, resulting in a loss of $300 million. Unfortunately, the real losses are likely much higher. Inexperienced investors are especially vulnerable to scams that involve collectible coins. Because the value of these coins can vary widely, they are often difficult to assess.
When buying coins from a dealer, it is important to research the coin dealer’s credentials and the coin grading company. Some dealers will claim that their coins are certified as genuine, but in reality, these coins may have been graded by an uncertified third party. It is also a good idea to get a second opinion, and consult a financial advisor before making any investment decision.