Investing in precious metals such as physical gold and silver can be a daunting task for average investors, especially with the presence of fraudulent schemes in the market.
Bad actors have been known to sell metals with lower purity or content than claimed, making it challenging for novice investors to detect such fraud. To protect yourself and your investments, it’s essential to be aware of the five biggest traps to avoid:
- Cable TV Ads and Celebrity Endorsements: Companies often use celebrity spokesmen to promote gold or silver coins, but they may upsell investors into overpriced rare or collectable coins, which may not see a return for decades, if ever.
- Individual Scammers: Scammers and thieves may prey on individuals, especially the elderly, using various tactics to sell fake or stolen precious metals.
- Crooked Depositories: Corrupt depository operators have been known to raid customer accounts or fail to deposit metals, operating as pyramid schemes and causing long delays in returning metals to customers.
- Phony Dealers: Fake dealers may sell precious metals but never deliver them, pocketing the money instead. Be cautious of newly created websites, sellers based in different countries, and those who only accept cryptocurrency or cash payments.
- Home Invasions and Thieves: Owning significant amounts of precious metals can make you a target for home invasions and theft. It’s important to keep your investments private and store them securely, such as in a reputable depository.
By being aware of these traps and taking necessary precautions, investors can protect themselves from fraudulent schemes and ensure their investments remain safe and secure.