Gold is becoming a more and more popular way of investing. Unfortunately, there are plenty of scam artists out there willing to take advantage of people who are new to the gold-buying process. It really pays to be as knowledgeable as possible before diving in. Read on to find expert tips on how to avoid fraud and gold-buying scams.
Know the warning signs of a potential fraud or gold-buying scam.
For instance, be skeptical of any company that guarantees a major profit with no financial risk. Scams are known for promising quick riches. If it sounds too good to be true, there’s a good chance it actually is.
Make sure a dealer discloses not just the upsides but also the downsides and potential risks.
Be wary of high-pressure sales tactics.
If a dealer tries to pressure you to immediately send cash, that’s usually not a good sign. This is a big decision so you’ll want to take your time. A reputable dealer will take the time to discuss your options and make sure you get the best product possible.
Another way frauds or gold-buying scams may try to pressure you is by scaring you with predictions of a major economic downturn. Scammers are experts at preying on people’s fear, so don’t let them get to you. If you feel like you’re being forced into gold buying, that’s not a great sign.
Also, if you first hear of the dealer through an unsolicited phone call, you should be skeptical of them.
Make sure you know as much about gold buying as possible before going forward.
Investments like this are very important, so you want to be at least somewhat familiar with how they work. For example, do some research on what the typical price range of gold is. That way, you’ll know if the dealer is overcharging or if they’re offering a price so low it seems suspicious. Another thing you should try to research is the typical fees. A legitimate dealer will also likely let you know what the fees are ahead of time, instead of surprising you later. Don’t stop yourself from asking following-up questions about the fees either. You want to make sure you know exactly what you’re paying for.
Take time to search online.
Thoroughly research and gather all the information possible about the company or dealer you’re considering as well. And try to verify the data as much as you possibly can. Make sure they have at least some sort of online presence. This can include an official website and some online reviews. A gold dealer should also have some references, so check those to make sure it’s not actually a gold-buying scam.
See if you can find out how long the dealers have been in business. The longer they have been in business the more trustworthy they are. You’re likely to feel more at ease when a dealer has more experience. Also, try to contact someone directly, either through email or via phone. Or if they have a business location, see if you can visit in-person.
Check the Better Business Bureau. First of all, if the company doesn’t even have a listing, that’s a good sign it’s fraud or a gold-buying scam. If it is listed, this is where you can see how long they have been in business, as well as their ratings and reviews. Contact the proper authorities, such as the Commodity Futures Trading Commission (or CFTC for short), if something doesn’t seem right.
Your online searching should cover as many bases as you can. For instance, see if you can find any additional information or feedback on social media platforms. When people have a negative experience with a company, they are more likely nowadays to post about it on websites like Facebook or Twitter. You may not be able to find anything, but it’s worth looking just in case.
Ask if the dealer has a buy-back policy.
Most reputable dealers do. This is important because it lets you know how you’ll be able to cash in your investment. A quality dealer should be able to thoroughly explain this to you. If they do have a buy-back period, make sure it doesn’t have limited terms, such as only covering certain amounts of gold. Also, ask about the repayment period, which legitimate dealers usually will have.
Make sure you can physically receive the gold.
Ask if the gold can be sent directly to you. That way, you can put it in storage where you’ll be sure that it stays safe. If a dealer says they hold on to the gold for you, you may want to be wary of working with them. This is definitely an instance where you want the proof of purchase.
Remember, it’s better to be safe than sorry.
Start out small just to be careful. No matter what, gold buying is a bit of a risk. You want to minimize your risk as much as possible, and starting small is a good way to do that. Some gold dealers might try to push certain deals for buying in bulk, but you shouldn’t jump into that right away.
And, of course, if you have major doubts, hold off on investing, at least for now. This isn’t something you want to do unless you are absolutely sure. You don’t want to regret it later.
Want further information? Forbes also has some helpful advice on how to spot fake gold and avoid fraud.
Now that you know these tips, you’ll be much better prepared to avoid fraud and gold-buying scams. And when you feel ready, consider choosing to invest with us at Swiss America. You can find more information on our website. And we have specific guides for avoiding fraud and gold-buying scams on our website as well. For instance, look into the news on gold fraud.
Since you're here...
We believe everyone in Indian Country deserves equal access to news and commentary pertaining to them, their relatives and their communities. That's why the story you’ve just finished was free — and we want to keep it that way, for all readers. But we hope it inspires you to make a gift of $5 or more to Native News Online so that we can continue publishing more stories that make a difference to Native people, whether they live on or off the reservation. Your donation will help us keep producing quality journalism and elevating Indigenous voices. Any contribution of any amount — big or small — gives us a better, stronger future and allows us to remain a force for change. Donate to Native News Online today and support independent Indigenous journalism. Thank you.