Protect Your Investments: 5 Gold IRA Scams To Beware of in 2024

best gold ira scams

By design, no industry is overly corrupt and bad. It’s just the excessive desires of some humans drive them into fraudulent activities that bring a bad name to the industry.

Unfortunately, investing is an industry with many fraudsters looking for ways to rip people off their hard-earned money.

I know you’ll be asking these two big questions, are gold IRA safe? And Is gold IRA a good idea?

Yes, and yes. Gold IRA is safe and is a good idea. In this article, I’ll show you the top gold IRA scams to watch in 2023.

As a bonus for reading this article, I’ll give you a guide to save you from losing your sweat to scammers.

After reading this article, you’ll be able to spot gold IRA scammers even before they open their mouths to speak.

Before we proceed, let’s look at some gold IRA statistics.

Gold IRA Statistics

  • More than 60% of households have at least one retirement plan.
  • 29% of American households have a traditional IRA
  • Only 12% of the American population owns gold. Although the survey did not specify if the gold was held physically or in IRA
  • 5.1% of males 35-54 own only gold-no silver
  • 360% increase in the price of gold between 1990 to 2020
  • 991% increase in the Dow Jones (stock index) during the same period
  • 198% increase in dollars over the same period
  • $4,419 return, as of 7/19/22, or $3,419 profit from gold
  • 50% of analysts use alternative investments for clients

(data from Investment Company Institute Report 2021)

As promised, here’s the comprehensive guide for spotting gold IRA scams and gimmicks.

Click on the banner to download it.

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Top Gold IRA Scams

As we mentioned in the introductory paragraph, no industry is inherently bad. Some greedy bad actors bring a bad name to the industry through their fraudulent activities.

Shortly, we will examine the top gold IRA scams you should avoid in 2023 and beyond. They are as follows:

1. Gold IRA Storage at Home

Let’s get things straight. You can’t store your assets at home. The Internal Revenue Service (IRS) stipulates that you can’t store your physical gold at home.

It has to be kept at an IRS-approved facility like a bank or other depository. And if you do, it will count as a withdrawal, and you will have to pay taxes.

That said, don’t let any money-hungry gold IRA agent or agency tell you otherwise. At times, they might want to use it as a selling point, so you’ll believe they are legit.

They are gold IRA scammers. Ignore them, and move on with your money.

The law states that storing any form of precious metal IRA asset at home is illegal. And the last time I checked, it’s still illegal.

2. Counterfeiting Coins

This scamming technique stings the most because it triggers deep regret of intelligence failure.

Counterfeiting coins is a gold IRA scamming technique that fraudsters use to sell fake coins in place of real ones. Usually, they disappear immediately after the transaction is done.

It’s mostly done by companies outside the United States that are not bound by the state’s laws.

For instance, a popular case of counterfeiting coins was carried out by Berlin-based BWF-Stiftung. The organization used a buyback option to purchase gold with an assured buyback price of 110 and 180 percent.

Not just that, but they promised higher returns on every repurchase. Later, it was discovered that only a small portion of investors’ funds was used to purchase gold. A large chuck of gold bars in the vault was fake.

Often, sellers of counterfeit coins use low prices and a promise of higher returns as bait to lure you. Remember this as a rule of thumb, if the offer looks too good to be true, it’s probably not real.

Essentially, make sure you deal only with recognized dealers or agencies. And research them properly before transacting to save yourself from losing your money.

3. Leveraged investment scams

Leveraged investment gold IRA scams mainly target senior citizens and the elderly.

Here, they use the prospect of higher future prices to entice you into investing in gold. They tell you the price will 10X in a couple of months, that you should hurry and invest now.

Sadly, they’ll advise you to go as far as borrowing from someone, so you will pay them off from your profit once it appreciates.

The worst is that the seller will convince you to pay immediately, and you’ll only be charged for storage. While in reality, they will charge you from gold equity as well with the hopes that you forget the initial arrangement.

To safeguard yourself and your retirement funds, you should always be vigilant. Most importantly, eliminate your greed as much as possible because these fraudulent dealers always capitalize on it to carry out their activities.

4. Misleading contracts

To illustrate misleading contracts, I’ll share the gold bullion scam story in Bullion Direct, Inc.

Between the period of January 2009 to July 2015, Gold IRA investors were misled to sign contracts that stated that their funds would be used to buy gold on their behalf.

The funds were in tones of over $16 million. Instead of using these funds to buy precious metals, Bullion Direct CEO used the funds to furnish his ego. He used the funds to buy expensive properties and luxury office assets.

Before you sign any gold or silver IRA contract, ensure you read carefully between the lines. Better still, take the contract to your attorney or consultant to review the agreement before appending your signature.

No matter how the dealers try to sweet-mouth you into blindly signing a gold IRA contract, resist the urge to do it immediately. Hastiness is their trick.

Take the document home, think it through, and seek better counsel before proceeding.

5. Affiliate Scams

The fourth principle of influence in Robert Cialdini’s The Psychology Influence of Persuasion book talks about the law of liking. It states that we prefer to say yes to the requests of people we know and like.

Gold IRA scammers know this, and they capitalize on it. So, here’s how affiliate scams work.

The scammer uses shared affiliation to penetrate you, build trust, and exploit you.

Often, they take advantage of affiliations like churches, societies, neighborhoods, and any mutual community to win your trust.

Don’t fall for this one. Ensure you verify the authenticity of the dealer and broker before engaging their service. Remember the German proverb, trust but verify.

Want a more detailed guide on all the tricks used by gold IRA scammers? Click on the button below to download our free guide.

How to Report a Gold IRA Scam

If par-adventure, you’ve fallen for precious metal investment scams before discovering these tips. Or if someone close to you has been duped, don’t worry. All is not lost.

Contact the Federal Bureau of Investigation’s local field office to report the case or visit your state attorney general’s office.

Alternatively, you can report all forms of suspected fraud to the Federal Trade Commission or the United States Postal Inspection Service.

Criminal Investigations Service Center

1745 Stout Street, Suite 900

Denver, CO 80299-3034

(877) 876-2455

Validating a Precious Metal Company

To avoid Gold IRA scams, always confirm the legitimacy of a precious metal dealer from a third-party source. There are many rating websites that you can use, some of which are:

  • Trustpilot
  • Better Business Bureau
  • TrustLink
  • Business Consumer Alliance
  • RipOff Report
  • Ethics. Net
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Frequently Asked Questions

What is a Gold IRA Company?

A gold IRA or precious metal IRA is an individual retirement account that allows you to invest in precious metals such as gold and silver and other gold-related securities.

How does a Gold IRA work?

A gold IRA account is different from a traditional retirement account. Individual retirement accounts let you hold gold or related assets in your portfolio. And they can mainly be opened through a custodian or broker-dealer.

Is Gold IRA safe?

Yes, they are safe. That’s why you need to do your due diligence before investing. When done right, it could yield a phenomenal rate of returns.

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