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Scam Companies Emerge to Take Advantage Of Newbies Looking for Gold and Silver

Gold Silver Scam

As with every crisis, the COVID-19 pandemic has brought about a number of opportunities. As the saying goes, there’s an opportunity in every crisis, and sometimes, it’s the best thing that can come from an event that’s often devastating in other ways.

Unfortunately, the nature of opportunity is such that it makes no distinction between the ethical and the corrupt.

What’s clearly astounding is the depth of imagination that a crisis can bring to those who are desperate enough to make a buck at the expense of honest people who are simply trying to get by. We hear of fake cures, fake COVID-19 charities, fake masks (can you believe that?), and, most unsurprisingly, fake investment opportunities.

The precious metals industry is not immune to the infections of illicit opportunity. And with a surge in demand for safe-haven amid economic uncertainty, fake gold and silver coins are showing in plenty of places. So, we’re going to say it: BUYER BEWARE!

Scammers’ targets are largely those who are new to precious metals investing. Their means of communication: Robo-calls, online ads, radio shows, and podcasts. Recently, our beneficiaries at the Anti-Counterfeiting Educational Foundation issued a warning about fraudulent gold and silver schemes, which you can read here. But for those new to the industry, how might they have received this crucial information?

The schemes include overpriced numismatic coins, often in plastic cases, flashing fake certifications. If you have very little knowledge about certifications or grading services, then you’re vulnerable to getting taken for thousands of dollars as false “Certificates of AUTHENTICITY” colloquially speaking, these fake credentials can artificially inflate the price of worthless coins ranging downward from cheap to zilch.

There is one way to avoid these fraudulent schemes, however; and it’s where you might least expect it. Narrow your investment search to non-CUSIP coins that are .9999 gold or silver, and have them checked by a depository providing authentication services prior to being delivered to your home. By taking this simple step--namely, sticking with non-CUSIP coins selling at relatively low premiums and seeking professional authentication--you can eliminate the risk of getting scammed. Here is some information on our partners at the Delaware Depository, which is the largest bank-regulated trust of this type. 

Read More: Delaware Depository Storage Services for the public.

There’s another thing to look out for: legitimate coins that are exorbitantly overpriced. Many dealers who’ve been caught participating in this unethical practice have been prosecuted. It’s important not only to learn about gold and silver pricing but also to do your due diligence toward investigating a dealer’s industry and BBB rating prior to any transaction. If you find a dealer that has plenty of advertising yet isn’t well-rated by customers or among industry peers, that alone is telling you something important. Be wary of such dealers. 

Another thing to look out for is gold and silver mixed with a filler. For instance, there are many one-ounce gold American Eagles that are mixed with tungsten (a chemical element) and sold without disclosure. These are hard to detect in terms of physical composition, but you can probably sense a scam when the price is discounted far below market value and the offer is coming from a dealer that’s either unknown or disreputable.

Fake Gold Coins Being sold on Alibaba for a few hundred dollars.

As the saying goes, if it’s too good to be true, then you’re probably right. Follow your gut, but most importantly, follow due diligence.

With that said, we at GSI Exchange have an established record of excellence. Although we’ve been in this industry only since 2014, we’ve rapidly established ourselves as a leader in precious metals. Part of this has to do with our veteran workforce--75 years of combined experience--but most of it has to do with our professional standards for sales, market and economic expertise and, most importantly, ethical practices. We are Forbes Finance Council members, BBB A+ rated, Dun and Bradstreet Verified, Business Consumer Alliance Charter Members, and we’re known for our Lowest Price Guarantee on the direct sales of Gold and Silver coins, as well as our signature wholesale precious metals trading whether for a standard investment portfolio or as part of a Gold IRA, a Silver IRA or a combined Gold & Silver IRA account.

Read More: GSI Exchange Sales Reps are all background checked and certified dealers with the National Ethics Association. 

When we see scams in our industry, we call attention to them as soon as possible. Such schemes threaten the integrity of the precious metals industry as a whole. And given the amount of time and effort we’ve spent toward upholding high industry standards, the last thing we want to see is a decline in the industry’s ethical expectations and a lack of trust resulting from the actions of a few bad actors.

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All articles are provided as a third party analysis and do not necessarily reflect the explicit views of GSI Exchange and should not be construed as financial advice.

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