Gold in any of its forms are a valuable asset and is sought after by a lot of investors and buyers. Unfortunately, due to its value, some people and companies result to scams and other fraudulent acts.
Needless to say, the whole gold IRA accounts firm and industry is a legit and reliable way to invest for the future. But every now and then, there are reports of scams and other forms of dishonesty.
These dishonest practices are continuing to hurt the reputation not only of the industry, but of those who are really honest. In this article, we will be looking at several gold IRA scams to avoid.
What Are Gold IRA Accounts?
Gold could be a good way to diversify your portfolio, reduce total risk, and preserve your money in the long run. Individual retirement accounts (IRAs) in gold are one way to build wealth.
There are several financial institutions that provide gold IRA accounts, so it's important to shop around before making a decision. This is a prerequisite, whether you are a newbie or a veteran.
With a retirement account, a self-directed IRA must invest in actual gold. You can also invest in physical assets like precious metals, real estate, businesses, and other sorts of investments.
Your choice must be top rated gold IRA firm wherein you can do business legitimately and be provided with transparency of records and activities. An example would be Augusta Precious Metals.
Common Gold IRA Scams
In any form of investing, a certain risk of a certain degree would always be present. That truth is also present when someone considers to invest and create a gold IRA account.
There are some actions and signs that you must be wary of when you are conducting business related to investment retirement accounts. Six of these common scams are listed below:
Bait and Switch
This is probably the most common form of standard not only in the precious metals and IRA industry, but also is prevalent among any type of businesses and activities.
It involves answering to an email or message, which is probably sent to a lot of email account and cellphone numbers, promising a certain product or activity at the lowest of prices.
The catch here is once the unsuspecting victim clicks that certain message and thinks that this is the opportunity he is waiting for, he will then be met with the phrases related to its time limitedness.
The victim is pressured to avail or purchase the said product and service because of the prospect of owning it at a lowest price without knowing that he has already taken the bait of a scammer.
There is a fine line between an honest salesperson trying to persuade you to purchase something from an overly-assertive salesperson pressuring you to avail of such products.
These salespeople would often introduce a certain product with some benefits or promised interest rates and would ask you to move your monetary assets into their account to facilitate the transfer.
By the time you internalize that the whole transaction was a scam, you can no longer contact them or that you have been blocked by whatever medium they were using.
The distinction between real and fake gold coins can hardly be noticed by the naked eye, more so for those who are absolute rookies when it comes to precious metals.
That being said, scammers selling and trading 'gold coins' are masters of their own craft, so to say. They mixed whatever raw materials they need and copy the model of authentic one to a believable degree and offer them as 'genuine'.
A lot of laws and rules set by your country and other financial institutions decree a very hefty sum for bail and jail time for those who are caught manufacturing and selling fake coins.
You should also be wary whenever purchasing coins since you will also be held accountable for your actions. Only conduct business with a trusted and reputable firm such as this one.
Shaved and Off-weight Coins
Some gold dealers shave a few grains of gold off each coin they sell you, which you may find hard to believe. This all adds up to the benefit of the dealer at your expense.
Scammers have shaved a few grains of metal off existing coins or bars in some situations. Crooks are punching holes in gold bars and fill them with lead, which weighs nearly the same as gold.
If you are making transactions with someone, ask for an initial overview of the products they offer and consult a trusted professional before buying from them.
Coins are being rated by their quality and rarity and values depend based on these respective ratings. NGC and PCGS are two third-party companies that provide independent grading.
Some dealers assess your knowledge regarding coin grade and inflate the grades of some coins that may appeal to you. These scammers mainly prey on those who are new to this industry.
Others even fabricate grading documents or switch coins, selling a lower-graded coin with a higher-grade certification.
Selling of Ineligible Coins
Owning gold and precious metals in any form is an entirely different matter from acquiring them to add to your IRA. Law jurisdictions bars one from owning jewelry that is connected to an IRA.
For example, in a gold IRA, some precious metals are only allowed in their coin, round, or bullion forms. Also, a certain degree of quality is needed for these metals to be eligible to be added to your account.
To be put into an IRA, a gold coin, round, or bar must be at least 0.995 percent pure. Not every coin in the world will be able to pass this first qualification.
You must understand that in every industry or business endeavors, there will be those who aims to generate an advantage over others even if it involves scamming.
Same is true in the precious metals industry and gold IRA accounts. A list of the common scams are listed above and it is your job to be wary of these actions for your own benefit.
Nobody will be scammed off of their money if they are cautious enough. You must be able to devise your own ways to weigh your decisions and actions.
Some ways on how you can avoid these scams involve doing research, conducting business with a legitimate firm like Augusta Precious Metals and custodian, and being realistic.
The next time someone offers you a really good offer regarding gold IRA, be sure to ask yourself if you are one step away from being scammed. After all, being cautious is better than losing your money.
Thank you for reading this 'Gold IRA Scam To Avoid'. Any comments and suggestions are deeply appreciated. You can leave them on the section below.