Gold IRA Scams: How To Avoid Them And Save Money for 2023

Updated On: November 22, 2022

Are you worried about investing in the wrong gold ira account because of high-pressure tactics by a shady precious metals firm?

Investing in gold as a physical asset or buying shares in companies that mine and produce gold is tricky but worth it. Gold has been an attractive investment for centuries due to its rarity, portability, and easy divisibility.

How to avoid gold ira scams

It is also a good hedge against inflation, as gold tends to increase in value when the cost of living increases. But we also hear a lot about gold scams. Some gold investors are scammed out of their investments, while others avoid scams by researching and investing with reputable companies.

The Gold IRA scams are usually perpetrated by dishonest gold dealers, coin dealers, and rare coin dealers. They may also come in bogus gold bars, counterfeit coins, or fake collectible coins.

We understand your concern, so we will show you how to avoid these scams in this guide. Don't worry. By the end of this guide, you will know how to protect yourself and your investment.

What Is A Gold IRA Scam?

A gold IRA scam is any fraudulent activity associated with a company offering a precious metals Individual Retirement Account (IRA) investment opportunity.

These scams can come in many forms, from Ponzi schemes and bogus investments to fake companies.

If you have a traditional IRA, you may be able to roll over some or all of its assets into a gold IRA. Precious metals IRAs can be a great way to diversify your retirement portfolio and hedge against inflation.

But as with any investment, there are risks. And with gold IRAs, those risks can be magnified by unscrupulous companies and individuals looking to make a quick buck.

Commonly the online presence of these gold IRA companies is compelling, with impressive-looking websites, fake customer testimonials, and promises of great returns. They may even have an actual address and phone number. But don't be fooled. In many cases, these are just scams to get your money.

Gold IRA is in high-demand

Precious metals IRA scams usually start with a telemarketer cold-calling investors, often seniors, and pitching them on the idea of rolling over their retirement account into a gold IRA.

The caller then refers the investor to a “gold specialist” who pressures the investor to buy gold coins or bullion coins at an inflated price and have them shipped to a custodian that the specialist recommends.

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The problem is that many of these “custodians” are just fronts for the scam operation, and the gold doesn't exist or is overpriced. The investor never sees the physical gold and is left holding the bag when the scammer disappears with their money.

Other times, the people that run these gold IRA scams will set up fake companies and then try to sell investors gold that doesn't exist. 

The biggest warning sign is that they may also use high-pressure sales tactics, misleading marketing materials, and false promises of high returns to get people to invest.

What Are The Common Scams For Gold Investments?

Have you ever been called out of the blue by someone trying to sell you gold investments or coins?

If so, then you’ve probably been targeted by a gold scammer. These scammers typically use high-pressure sales tones to get you to buy gold coins or bars at an inflated price and have them shipped to a custodian that the specialist recommends.

To avoid precious metals investment scams, first, we must understand what they are. Here are some of the most common scams used by gold dealers:

  • Ponzi Schemes
  • Bogus Investments
  • Gold Rush Fraud
  • Overpayment Scams
  • Fake Storage Facilities
  • Shady Affiliate
  • Gold Certificate Scam

Ponzi Schemes

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.

Ponzi schemes attract new investors by offering higher-than-average returns in short-term investments. They usually promise unrealistic or guaranteed returns and involve unregistered investments.

Bogus Investments

Bogus investments are those that do not exist, are overpriced, or are both. For example, a gold coin dealer may tell you that he has gold or silver coins worth much more than their actual melt value. Or, a dealer may try to sell you gold bars that are not pure gold or do not exist.

Gold Rush Fraud

In a gold rush fraud, promoters encourage investors to buy “mining claims” that do not exist. They may also sell you shares in a non-existent gold mine or promote a “get rich quick” scheme involving gold.

Many times a gold dealer will set up a fake website and use false testimonials to promote their scam.

Overpayment Scams

In an overpayment scam, the gold dealer will send you a check for more than the amount you are owed. They will then ask you to wire them the difference. The problem is that the check will eventually bounce, and you will be responsible for the entire amount.

The precious metals dealer may also ask you to buy gold coins or bars with a credit card and then have them ship the goods to an overseas address. They will promise to pay you back when they receive the merchandise, but they will never do so.

Fake Storage Facilities

The gold dealer will set up a fake storage facility in this scam and then ask you to store your gold there. They will charge you exorbitant fees for this service, and the facility will not be secure.

In some cases, the gold may not even exist. You could lose everything if you do not have your gold stored in a safe, insured facility.

Shady Affiliates

In an affiliate scam, the gold dealer will pay a commission to someone for referring customers to them. The problem is that the person receiving the commission may not be licensed to sell gold and may not be telling you the truth about the products they sell.

They may also charge you hidden fees or pressure you into buying more gold than you can afford.

Rare Coin Valuation Scam

When gold prices rise, scammers often try to sell rare coins at inflated prices. They may tell you that the coin is worth more than it is or will be worth more in the future. Rare coins can be a good investment, but you should get a professional opinion on their value before buying them.

Gold Lease Scam

In a gold lease scam, the gold dealer will offer to lease you gold at a low rate, with the option to repurchase it later at a higher price. The problem is that the gold may not exist, or the dealer may not have the right to lease it.

If you do not have the gold when you try to repurchase it, you could lose a lot of money.

Gold Certificate Scam

Sometimes scammers will try to sell you fake gold certificates. They may tell you that the certificate is backed by gold when it is not. Or, they may say that you can use the certificate to buy gold at a later date, but you will never be able to redeem it.

Precious Metals Investment Scams

This investment scam promises unrealistically high returns with little or no risk. They use aggressive sales tactics, false claims, and pressure to make you invest in their product.

These scams often involve unregistered investments and push you to buy before you have time to consider them. Before investing in any precious metals investment, ensure you understand the risks involved.

There are many more types of gold scams that are still unidentified. So, be aware of such scams and not get trapped in them. It is better to be safe than sorry. If you have doubts about a gold dealer, it is best to avoid doing business with them. There are many reputable dealers, so you should not have trouble finding one.

What Are The Top Tips for Avoiding a Gold IRA Scam?

Gold IRA is the ultimate asset portfolio diversifier. It can hedge against inflation and protect your retirement savings. But with the increase in scams, now many people are skeptical about investing in it. So, here are the top tips that will help you avoid a gold IRA scam:

Avoid Pushy Sales Pitch

A good gold IRA company will never pressure you into investing. They will explain the process and benefits of investing in a gold IRA and then leave the decision to you. Be very careful if someone is talking in a distinctive high-pitched voice and trying to push you into investing.

If the scammer uses the phrases like "time is running out," "this offer won't last long," or "I have to leave the country soon," hang up the phone immediately. A professional and certified gold IRA company will never pressure its potential customers.

Check The Company's Credentials

Ensure that the gold IRA company you are dealing with is a member of the American Numismatic Association (ANA) or the National Association of Unclaimed Property Administrators (NAUPA).

BBB accredited Gold ira

These organizations have stringent guidelines, and only legitimate companies can become their members. In addition, check if the company is registered with the Better Business Bureau (BBB). Many scam companies do not have these credentials.

Research The Company Thoroughly

Research the company thoroughly before purchasing gold or gold jewelry. Check if the company has a physical address and contact information like telephone number, email address, etc.

You can even visit their office to get more information about them. A legitimate company will always have a physical presence and be happy to share its contact information.

Read The Contract Carefully

The clauses and terms of the contract should be clearly explained to you by the company. It would help if you understood every single contract word before signing it. If anything is not clear, ask for clarification.

A reputable company will have nothing to hide and will be happy to explain the contract in detail. Many investors have lost their money because they didn't bother to read the agreement carefully and later found out that it was not what they thought it was.

Professional gold IRA dealers will never have any problem providing you with the contract beforehand so you can read it thoroughly.

Confirm The Gold Deposit

Once you have decided to invest in a gold IRA, the company will send a representative to your house to pick up the gold coins or bars. Before handing over the precious metals, ensure you get a receipt that mentions the type and quantity of metals being deposited.

Once the deposit is made, call the company and confirm that they have received your gold. The best way to avoid gold IRA scams is to buy gold from a reputed company.

Get Everything In Writing

Always get everything in writing before buying gold or other precious metals, whether the sales pitch, contract, or receipt. A verbal agreement is not legally binding, and you will have no proof if something goes wrong.

Many times, scam companies will make false promises and later deny ever saying them. So, it is essential to get everything in writing.

Stay Away From Collectible Coins

Many scam artists will try to sell collectible or counterfeit gold coins at exorbitant prices, claiming they will go up in value in the future. They will even give you a false appraisal report to show how much the coins are worth.

In reality, these coins are not recognized by the IRS and cannot be included in your gold IRA. So, stay away from such coins to avoid being scammed.

Look Out For Shaved Coins

Another trick scam artist uses shaving a small amount of gold from the coins and then selling them at full price. This isn't easy to detect unless you are an expert. So, it is always better to buy gold coins from a reputable dealer.

The company's gold and silver products must meet the London Bullion Market Association (LBMA) standards.

Avoiding scams is essential but especially crucial in gold IRA investing. This is because your retirement savings are at stake. So, do your homework correctly and invest in a gold IRA only if you are sure about the company you are dealing with.

6 Quick Warning Signs For Gold IRA Scams

To quickly avoid gold IRA scams, here are a few warning signs to watch out for:

Undue Persuasion

Don't believe in the first contact. A legitimate gold IRA company will give you the time you need to make an informed decision without putting any pressure on you.

High-Pressure Sales Tactics

If a gold IRA company uses high-pressure sales tactics, be very wary. This includes complex sales, limited-time offers, and gifts or prizes. Fraudsters often use these tactics to get people to make rash decisions.

Guaranteed Returns

No investment is ever guaranteed, no matter what the sales pitch says. Be very suspicious of any company that guarantees returns, especially if those returns sound too good to be true.

Minimizing Risk

If the salesperson uses phrases like "minimal risk" or "no risk," they are not being honest with you. All investments come with some risk, and you should be aware of that before making any decisions.

Upfront Fees

It is widespread for gold IRA scams to have upfront fees. These fees are usually hidden in the contract's fine print, so read all agreements before signing anything.

Asking For Personal Information

Be aware of any company that asks for personal information, such as your Social Security number or bank account information, before you have even had a chance to learn about their services.

The Importance Of Choosing A Reliable Gold IRA Company

A reliable IRA company is the paramount concern for anyone looking to invest in a Gold IRA. An unreliable company can result in the IRS confiscating or taking away your assets.

Confidential and safe gold

Furthermore, a reputable and reliable company will offer more customer services and have a better overall reputation. The following are 5 essential factors that show the significant importance of choosing a trustworthy gold IRA company:

Offer A Better Pricing Structure

An unreliable company will generally have higher fees associated with its services. They may also have hidden costs that are not initially apparent. A reputable and reliable company will be more transparent with its pricing structure and will not have any hidden fees.

Provide Greater Customer Service

Scammers don't generally offer good customer service as they know they will not be able to answer any questions their victims may have.

A reputable and reliable company will have a dedicated customer service team that can answer any questions that you may have. If you find that a company's customer service team is unresponsive, this is a huge red flag.

Have A Better Overall Reputation

With an unreliable company, you will find that its reputation will be tarnished. This is because they will have a lot of complaints filed against them by their past victims.

Google research will reveal a lot about the reputation of a company. It would help if you only went with a company with a good reputation.

Give You More Investment Options

A reputable and reliable IRA company will offer you more investment options. This is because they want to give their clients as much flexibility as possible.

They understand that different people have different investment goals. They will offer their clients a wide range of investment options.

Our Top Three Safe IRA Providers

I understand your concern about finding a trusted and reliable company to invest your hard-earned money. This is why we have compiled a list of the industry's three best and most reputable IRA companies.

These gold ira companies have been thoroughly vetted and have passed our stringent standards. The following are the far from being gold IRA scams and are backed by professionals.

Product

Features

Price

#1

Augusta Precious Metals Logo

Augusta Precious Metals

  • Joe Montana approves
  • Lifetime support and 1-1 call
  • Thousands of five-star reviews

#2

Goldco box logo

Goldco

  • Best Buy Back Program
  • Approved by Sean Hannity
  • A variety of precious metals 

#3

noble gold logo box

Noble Gold

  • Offers a free gold and silver investment guide
  • Purchase IRS-approved physical gold bars and gold coins in a gold-backed IRA
  • IRS approved coins

Augusta Precious Metals

Augusta precious metals is the premier provider of gold and silver IRAs. They are a highly reputable and trusted company with over 10 years of experience in the industry. They offer their clients a wide range of investment options and have a very competitive pricing structure.

In 2012, the Business Consumer Alliance rated them as a five-star precious metals dealer. Once you have created your IRA account with Augusta, you will have a dedicated account manager to help you with all your needs.

Goldco

It is a privately held precious metals dealer that was founded in 2006. Goldco is one of the industry's largest and most respected companies, with over $1 billion in assets under management. They offer a wide range of investment options, including gold, silver, platinum, and palladium.

They also offer their clients various storage options, including segregated storage, home storage, and offshore storage. Goldco is one of the few companies that provide their clients the opportunity to invest in physical gold and silver. IRA rollovers can take up to 48 hours to process.

Noble Gold Investments

Noble gold investments have been operating in the precious metals industry for over 10 years. This firm sells its clients investment-grade gold, silver, platinum, and palladium coins and bars.

All their products are IRA-eligible and come with a 100% satisfaction guarantee. With a 5-star rating on TrustLink and an A+ rating on the Better Business Bureau, you can be sure that your investment is in good hands.

Noble gold offers two IRA options; a traditional IRA and a Roth IRA. Their tremendous customer service and support make them our top choice for gold IRA providers. Noble Gold Investments is the right choice if you're looking for a reliable and reputable company to invest your money.

Conclusion

IRA Scams are happening all over the world, and the gold and precious metals is growing. There have been a lot of reports about gold IRA scams, with scammers using various strategies to dupe investors.

Knowing the different types of gold IRA scams and how they work is essential to avoid being scammed. Precious metal IRA assets are often the target of scams. Many scams can be easily avoided by doing your due diligence and research before investing in a gold IRA.

If you have any doubts, it is always best to consult with a financial advisor or an expert in the gold industry. Always remember, if something sounds too good to be true, it probably is. Be vigilant, and don't let scammers take advantage of you.

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About the Author

Colin Shipp is a marketer who has been working remotely full-time since 2015. He specializes in growth marketing, content marketing, online courses, and remote work. On ColinShipp.com he writes about strategies he is using in his own life.