THE NUMBER OF GOLD SCAMS WERE AT AN ALL-TIME HIGH IN 2019
Gold is and always has been considered one of the best investment options out there, but the downside of that fact is that it has led to an endless amount of questionable characters trying to take advantage of gold’s sterling reputation and rip people off in the process.
In 2019, we’ve saw an unprecedented number of gold scams out in the wild, looking to prey on honest investors that are looking for a safe store for their wealth. We’ve also seen gold prices steadily climb, making excellent gains and outperforming nearly every other asset class. Starting the year in the $1200’s per ounce, the price of gold has shot up to the $1500 levels, with bullish signals continuing.
This isn’t going unnoticed, and more and more investors are looking to get in. So much money is flowing into the gold markets, and it’s attracting more and more scammers trying to make a dishonest buck.
The year began with a massive gold scam bust in Hong Kong, where police arrested 14 people that defrauded victims of $80 million. The group operated a fake investment firm and tricked their victims, many of them retirees, into handing over huge amounts of cash, supposedly for investing in gold and other commodities.
The victims were cold-called or contacted via social media, and encouraged to authorize the fake investment company to invest on their behalf on the London commodities market. The fake company then told victims their investments had failed and that their money was gone.
Another major gold scam occurred this past September, and was a bit more unusual in nature. A New Jersey man used fake dating profiles to defraud users of nearly $2 million in his gold scheme. He posed as a soldier recently returned from the Middle East and used fake or stolen identities of U.S. soldiers stationed overseas to make it seem more authentic. After wooing his victims, he said he needed funds to transport gold bars recovered in Syria. Over 30 people were affected in the process, and one even died by suicide after wiring him over $93,000.
Wisconsin Jeweler and owner of Robert Haack Diamonds, Bret Eulberg, warns that he is hearing more and more about a fake gold scam that he calls “a big problem.” The sob stories from victims usually sound the same: “It’s typically a nice, well-dressed guy. In a nice car, maybe he has a kid in the car,” Eulberg said. “He says, ‘Hey, I’m from Chicago, I need some money. I have this piece of gold. Can you help me out?’
They agree to buy the gold. There’s just one problem though, the gold is fake. Worthless. Eulberg said that the scam has cost customers tens of thousands of dollars, and that’s just what one small jewelry store owner has heard about. It’s happening everywhere.
It’s unfortunate for the victims here, but one can learn from their mistakes. If you’re considering buying physical gold, there’s an array of different tests that jewelry stores can perform that will verify you’re dealing with the real thing. The tests are usually free, so if the seller has nothing to hide then they shouldn’t mind at all.
It’s important to do your research when you’re investing in gold. For example, in the Hong Kong case, if they had done a little bit of homework and dug into the details of the so-called “investment company”, they would’ve seen it was brand new and had absolutely no history whatsoever. When you’re investing in gold, you want to be dealing with a trusted, established company that has a lengthy track record of success.
Keep these examples and tips in mind whenever you are dealing with your investments and you’ll have a huge head start over anyone trying to to defraud you. We hope it will help you keep your wealth safe for your future, your family, and for whatever else life has in store.
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