Investing in gold can make you feel like royalty. But guess what; all that glitters is not gold.
Gold scams abound, so you must be keen before buying gold or rare coins.
You see,
Gold is a reliable asset that can hold well against financial uncertainties like inflation, political turmoil, economic meltdown, etc.
With such qualities, it's not surprising people buy gold without adequate research. As a result, they fall victim to unscrupulous gold dealers, eagerly waiting to take advantage of their unawareness.
Gold scammers often target senior citizens looking to hedge their retirement.
If you're planning to buy gold in whatever form, be it gold bars or gold coins, you need to read this article before investing your money.
The post covers the following topics to help you maneuver the precious metals market:
- Common gold IRA scams and how they're executed
- Why you should always use reliable gold IRA companies and precious metals companies when buying gold and other precious metals
- Gold scams signs to look out for
- How to avoid a gold IRA scam
- How to report precious metal IRA scams
- How to choose a good gold IRA company
- The best gold IRA companies and more.
Let's dive right into it;
Common Gold Scams
Dishonest precious metal dealers craft well-thought-out schemes to fleece unsuspecting gold investors off of their money.
Here is a rundown of common gold IRA con games and how they operate.
Bait and Switch Scam
Here's how bait and switch scams look;
- You see an ad purporting to sell physical gold
- You click on it and exchange your email
- You receive an email offering you a good deal
- You start to engage with the "gold IRA company."
- The conversation changes down the line, enticing you to buy something totally different.
- You buy into whatever deal and lose your money just like that. The person on the other end stops replying to your emails.
The scammers may continue to engage with you to scam you for more money.
Sometimes the scammers will promise to repurchase the gold at a higher price. Of course, that'll never happen.
Bail and switch crooks can also promise to sell you gold jewelry at a ridiculously low rate compared to current market prices. Once you buy, they claim to be out of stock, taking you around in endless circles.
Key takeaway: Never engage with people purporting to sell you physical gold by sending you many emails trying to convince you to spend your money.
Gold scammers use high-pressure tactics to get the cash out of your pocket before you start to ask questions.
Damaged or Shaved Coins, Rounds, and Bars
Damaged, shaved coins, round and gold bars revolve around selling you precious metals that have been tampered with. As a result, you end up spending money on gold that's not worth the price.
Scammers shave metal grains from gold or silver coins and spread them on a lead bar. Some even sell damaged or fake coins weighing the same as genuine ones.
In most cases, these scammers rarely allow you to see the actual gold until you buy it. Or, they can show a few genuine coins or bars, then scam you once you've wired the money into their account.
Key takeaway: Insist on seeing the actual gold. Also, ensure you test the gold using methods like calibers to ascertain the coin's thickness. You can even check the gravity.
Counterfeit Coins

Counterfeit gold scams thrive in China and Africa. However, that doesn't mean you can't run into counterfeiters in other parts of the world.
As the name suggests, the scam involves selling counterfeit coins.
A story is told of Jonathan Kirschner, a 34-year-old Morristown native gold scammer found guilty of importing and selling counterfeit Morgan dollars.
Kirschner was also convicted of selling counterfeit gold coins worth $11,000 in a separate incident.
Kirschner posed as a federal agent. He'd appear dressed in a fake Bureau of Alcohol, Tobacco and Firearms badge when meeting gold investors. That way, it was difficult to suspect that he was up to something fishy.
Outside the United States, scammers run well-organized criminal gangs conning people huge amounts of money.
China is notorious for counterfeit gold coins and bars. These criminals apply a thin plate of gold on tungsten, copper, or lead, duping investors into thinking they're buying genuine bars.
Most counterfeiting happens online.
Unless you're an experienced gold buyer, it's hard to tell if the gold bars are fake or not, especially over the internet.
In an online transaction, you only have a few photos and perhaps a short video to rope you in. Some scammers will even ship you the counterfeit gold only to realize you were scammed when you need to sell it.
Key takeaway: Buy your gold from a trusted precious metals dealer. You shouldn't purchase gold unless you are engaging with a well-known and highly rated company like Augusta Precious Metals.
Further, ensure you know enough facts about the collectible coins you want to buy. An ounce of 24k gold coins, like the Canadian gold maple leaf coins, for instance, weighs 31.1 grams.
You can use online tools to help you determine how much rare proof coins should weigh.
Affiliate Scams
Affiliate scammers pounce on people they know. They take advantage of the relationship to scam them.
Think about it
A well-known member of your church comes up to you. They have a juicy deal about purchasing gold as an investment or retirement plan. Chances are, you'd trust them, right?
Here's how Larry Bates did it.
Larry teamed up with his wife and two sons. The quartet viciously marketed his precious metal company, the First American Monetary Consultants, through Jewish and Christian television and radio stations.
Further, Larry organized seminars and conferences across the United States. He targets church members. He spread a fake gospel about an imminent economic meltdown, advising members to invest in precious metals.
Further, Larry organized seminars and conferences across the United States. He targets church members. He spread a fake gospel about an imminent economic meltdown, advising members to invest in precious metals.
Larry scammed his followers a staggering $87 million between 2007 and 2013.
Investigations into the gold scam revealed that Larry used the money to fund his lavish lifestyle.
He'd also used part of the money to build the International Radio Network, a Christian media organization created to further promote his fake gold investments schemes.
Larry was found guilty of operating a criminal syndicate and was sentenced to 627 months in prison with his wife and two sons.
According to a report by the Federal Trade Commission, African Americans and Latin Americans are the prime targets for gold affiliate scams.
Strangers aren't the only ones who conduct precious metals investment scams. That person close to you can scam you into buying fake gold.
So, if you don't want to lose money, interrogate precious metal dealers even if you know them well. You'll want to be more cautious if the deal is unsolicited.
Home Storage Gold IRA
Home storage precious metals IRA scam involves selling and holding bullion coins, physical gold, silver coins, platinum, and palladium against the IRS regulations.
For starters, the IRS requires that precious metals be held in an IRA or other retirement accounts in an IRS-approved custodian like a depository facility or third-party vault.
Individuals cannot store gold IRA assets in a depository safety deposit box at home.
Still, unscrupulous precious metals dealers purport to offer home store IRA services.
These gold IRA deals claim they can help you buy gold coins, platinum, silver, and other precious metals and deliver them to your doorstep, enabling you to store them inside your house instead of keeping them in a gold IRA account.
Indeed, you can store gold at home if it's in your name.
However, if you want to hold the physical gold bullion in a retirement account, you must store it in a third-party IRA custodian until you want to sell it.
Before you invest in a gold IRA, ensure you know how the process works. In fact, you're better off with an experienced company like Augusta Precious Metals.
Allow professionals to handle your gold investments from A to Z.
Gold IRA Scams
There's more to gold investing than just finding a reliable gold dealer.
If you're looking to buy physical gold, rare coins, or gold coins to hold in a precious metal IRA, there are a few things you need to know.
To begin with, the IRS and Congress have put a cap on the gold type and precious metals you can hold in precious metals IRAs as follows:
- You cannot buy collectibles, jewelry, or gems different from specific bullion coins for your IRA investments.
- Your precious metal investments must be bars, bullion coins, or rounds with the required fineness and purity. All the precious metal content must have a purity of over 99.5%.
- Only a national government mint, manufacturer, refiner, or assayer accredited or certified by ISO 9000, TOCOM, LPPM, LBMA, LME, NYSE, COMEX, and NYMEX can produce precious metal assets.
- You cannot invest in circulated or damaged non-proof bullion coins.
- Small bullion bars must match exact weight specifications.
- Proof coins must have proof of authenticity. They must also be complete, in original mint packaging, and in top-notch condition.
Why do you need to know the specifics above? … because it's easy to become a victim of precious metal fraud if you are not aware of the basics.
While there's enough information about precious metal IRAs in the public domain, it's not uncommon for crooked gold dealers to float pitches selling you numismatic gold bars, rounds, and collectible coins for individual IRAs. It is illegal to hold numismatic products and collectibles in a gold IRA account.
Suppose you hold unauthorized coins, collectibles, and numismatics in a self-directed retirement account. In that case, the IRS can seize your investment and compel you to take a taxable distribution of the entire sum.
Key takeaway: Gold IRA scams often befall people without enough information on how the precious metals IRA work.
A good gold IRA provider like Augusta Precious Metals takes you through an orientation session to ensure you know what you're buying.
You're better off gathering as much information as possible when investing in gold to avoid falling victim to a fake gold ira dealer.
Rare Coin Valuation Scams
Here, scammers dupe you into buying rare, proof, collectors, or uncirculated coins and remarkably high prices over the spot price.
The gold dealer may deliver fake coins of significantly lesser value. It is hard to tell the difference if you're a first-time buyer.
A story is told of a senior citizen who received an offer from a gold dealer to buy her $10,000 worth of Swiss gold coins.
The lady agreed to the deal and sent her coins to the scammer. Once the dealer received the coins, they claimed the price of gold had fallen and could only pay her $8,500.
It was not until she threatened the dealer with legal action that she got her coins.
Still, she received fake coins worth a measly $1,100. The woman never recovered her lost coins or cash.
Key takeaway: In most cases, you're better off with bullion coins.
Avoid rare coin speculation unless you're an expert or have insider information. Because bullion products sell relatively close to their spot price, scammers don't have much latitude to exploit investors.
Non-delivery/ Ponzi Schemes
In a Ponzi scheme, gold dealers take your cash meant to buy gold or other precious metals and use it to pay off other investors.
The architects of a Ponzi scheme use the money to enrich themselves. Eventually, the company disappears into thin air.
Ponzi schemes are difficult to detect. However, if a company asks you to pay a considerable sum upfront with a promise of high returns, it's time to run.
A perfect example is that of the Northwest Territorial Mint.
The company directors collected millions of dollars to deliver gold bullion coins and used the money to fund their expensive lifestyles.
Northwest Territorial Mint scammed over 2,500 investors with a total sum of $25 million.
Ask questions as early as possible.
While it's not uncommon for precious metal companies to delay in delivering gold, excessively long delays should raise a cause for concern.
Gold Scam Warning Signs
To avoid getting scammed, you must be able to sniff an IRA gold scam from a distance. Here are some tell-tale signs:
- A person or company telling you that gold investing is risk-free
- A dealer or gold IRA company that "guarantees" you profits with utmost certainty
- Internet, televisions ads selling you gold
- Gold IRA dealers are selling you precious metals below the spot price per ounce
- People selling you gold outside your country
- Boiler room pitches from strangers pushing you to buy gold
- People claiming there's a shortage of precious metals — something like "there are only eight coins left in the inventory" or claims.
How to Report a Precious Metals Scam?
Are you a victim of precious metals fraud? Did anyone sell you fake gold bars? Regardless of how you got scammed, there are a few options you can pursue to seek justice.
You can contact or report your incident to the following offices.
- Your state attorney general's office
- Your local FBI office
- The Federal Trade Commission office
- The United States Postal Inspection Service for mail fraud
- The Criminal Investigation Service Center at (877) 876 -2455
- The Commodity Futures Trading Commission (CFTC)
How to Choose a Gold IRA Company?

Your best bet to avoid a gold IRA scam is to choose a reliable precious metals firm to help you handle the entire process from start to finish.
Below are some factors to remember when looking for a gold or silver IRA.
Experience: Look for a company with a wealth of experience. In fact, the more the experience, the better. You want to deal with a company that knows what it is doing, and that can only come with years of first-hand experience.
Credibility: The best silver IRAs have a solid reputation. You can check what other people say about the firm to determine whether it is credible. Watch out for positive and negative reviews in equal measure. The more positive reviews, the more likely to be credible the company is.
Certification: Companies that run IRA scams aren't certified. You'll therefore want to request and verify certificates and licenses before engaging with any provider.
The Fees: You want to partner with a company with reasonable storage charges. The lesser the fees, the better.
Speaking of IRA providers, here's a list of the best Gold IRA companies you can leverage for your IRA investments.
The Bottom Line
Gold IRA scams happen more than you think. But if you empower yourself with the correct information, you can detect a gold scam before you lose your money.
While the examples highlighted in this post aren't the only scams, they are the most common.
That said, you can invest in a gold IRA without worrying about getting scammed by choosing a reliable company like Augusta Precious Metals.
You can find more information about Gold IRA lies at Augusta Precious Metals' website. They have published an excellent guide about the topic.
The guide reveals all the gimmicks and tactics shady gold IRA dealers use.