5 Tips to Avoid Gold IRA Scams

Everyone who invests wants to protect their financial security. That includes those who turn to Gold IRAs to diversify their portfolios and hedge against inflation. That said, the increase in popularity among gold and other precious metals has led to an uptick in Gold IRA scams. 

A Gold IRA is a reputable investment vehicle. You deserve to invest your hard-earned money with confidence. If you have concerns about how to identify Gold IRA scams and want to learn more about how to avoid them, the following guide covers what you need to know to keep your gold and precious metal investments safe and on the “up and up.” 

What Are Gold IRA Scams?

Gold IRA scams mislead investors who want to add gold to their retirement accounts. Gold scams might promise unrealistic high returns or stoke fears about economic collapse. In some cases, scammers sell counterfeit gold or precious metals at artificially inflated prices. 

Why is this such a big deal, especially for those who have already reached or are close to retirement age?  

Scammers push fraudulent IRA rollovers for one reason: Because seniors have accumulated more money in their retirement accounts than younger investors, the opportunity for scammers to receive a big payday is much more likely. If someone falls for the scam and moves the majority of their retirement savings into the fraudulent Gold IRA, it could lead to thousands or hundreds of thousands of dollars lost. 

As you consider Gold IRA investments, look for a trustworthy partner who can walk you through the process of buying gold, finding a custodian, and keeping tabs on your account(s). Advantage Gold has been one of the most trusted Gold IRA companies for years because we emphasize transparency with our clients.  

Common Gold IRA Scams

Gold IRA scams vary in severity, but they all have one purpose: to separate you from your money. Government rules surrounding Gold IRAs can be complex, which makes unsuspecting investors particularly susceptible to them. Beware of the following tricks that scammers use. 

High-Pressure Sales Tactics

The gold industry isn’t immune to high-pressure sales tactics, but recent increases in their number suggest criminality. As recently as last year, the Securities and Exchange Commission (SEC) filed charges against three Gold IRA executives for insisting that investors sell existing retirement assets to buy gold. They told the investors that gold was the only way to protect their money from fraud or market downturns. 

High-pressure sales tactics can be a red flag hinting at a potential scam. If you’re targeted with these aggressive sales tactics, take your time to think through the proposal at hand and thoroughly research both the company and offer before you agree to anything. 

Collectible Coins Sales

Some gold dealers may not know the rules (a problem in its own right), but collectible coins aren’t eligible for inclusion in a Gold IRA. The IRS has specific rules about approved coins and bullion. Sovereign coins from the United Kingdom and Liberty coins from the United States are both collectibles and not eligible for IRAs. You must purchase specific types of gold that meet exacting purity standards. 

If someone’s trying to sell you on collectible coins for inclusion in an IRA, think twice. It might be a Gold IRA scam. 

Inflated Prices

While gold maintains its value well, you must always be on the lookout for inflated prices. The SEC case we mentioned above alleges that the company’s markup on its products exceeded 130%, even though it told clients the items were only marked up by as much as 5%.  

It’s not illegal for companies to mark up their products, provided they’re not misrepresented. It may be unethical, however. A reputable Gold IRA company will always provide transparent pricing. 

Fake Gold

What’s worse than paying excessive costs for gold? Buying fake gold. Some scammers sell counterfeit goods to customers and cut and run. Before you commit to purchasing gold from any Gold IRA company, perform due diligence to ensure you’re buying from a reputable dealer. 

Delivering Lesser Products or Not Delivering at All

Some scammers may take orders for gold or other precious metals and deliver products of lesser quality (or counterfeit gold). A recent case in Texas led to a guilty plea for a man who scammed buyers out of more than $1 million by accepting wire transfers and delivering fake metals or items of dubious quality. 

Home Storage

There’s nothing wrong with purchasing gold directly and storing it in your home, as long as you’re not placing it in a Gold IRA. Precious metals that are part of a self-directed IRA must be held by an IRS-approved custodian. Direct delivery of gold for this specific purpose does not meet these requirements and could leave you facing massive tax penalties. 

Advantage Gold does offer direct delivery of gold outside of our Gold IRA accounts, but this is a separate offering from self-directed IRA products.  

How to Avoid Gold IRA Scams

With so many opportunities for bad actors to scam investors, what are the best ways to avoid Gold IRA scams? As it turns out, careful planning and attention to detail will get you far. If you’re concerned about the potential for scams, consider the following advice for avoiding them. 

1. Thoroughly Research Gold IRA Companies

One way to avoid Gold IRA scams is to only make your gold purchases through a reputable company. But how do you know what that means? A trustworthy Gold IRA provider will offer the following information, either voluntarily or with minimal prompting: 

• Positive reviews 
• Information about its partner IRS depositories 

• Responsive customer service 
• Transparent pricing 
• Accurate, updated information on offerings, fees, policies, etc. 

2. Avoid Unsolicited Calls and Emails

Once you’ve found the right company to handle your Gold IRA, you won’t need to deal with any others. That means you can ignore unsolicited phone calls and emails. Because you’ll have dedicated customer service lines and agents to deal with, you won’t have to worry about cold calls or sales pitches from other companies.  

And, even if you have yet to select a Gold IRA provider, be wary of unsolicited pitches. Reputable companies generally will not aggressively cold call or spam possible customers. 

3. Get Everything in Writing and Review All the Fine Print

A trustworthy Gold IRA company provides all information in writing for your review. If anything within the fine print gives you pause, clarify the details before you make a purchase. If you do fall victim to a scam, this paper trail can help you pursue legal action against the company or individuals who scammed you. 

4. Don’t Let Pressure Cause You to Buy

High-pressure sales tactics are a major red flag. Don’t let anyone try to convince you that the economy is on the verge of collapse and that buying gold today is the only way to avoid losing your retirement investments. A reputable company will address your concerns and stress that Gold IRAs are an essential part of a diverse retirement portfolio—not the only way to preserve wealth. 

5. Start With Small Investments

Ultimately, one of the best ways to avoid scams is to take small steps toward investing in gold or other precious metals. Instead of transferring a large portion of your existing portfolio into a Gold IRA, consider a small fraction to test the waters (and assess your overall comfort level).  

Even if you’re a seasoned gold buyer with a significant part of your investments in a self-directed IRA, playing it safe when dealing with a new Gold IRA company can help reduce your risk of fraud. 

What to Do if You Think You’ve Been the Victim of a Gold IRA Scam

Sometimes, you can do everything right and still be the victim of a scam. What should you do in this situation? Immediately contact the Commodity Futures Trading Commission (FCTC), the SEC, and (or) the Federal Trade Commission (FTC). You should also file a report with your local police department, especially if the gold vendor you used is local.  

If you already have an existing self-directed IRA, contact your custodian and report the fraud so that you can receive possible assistance in recovering your funds. 

How to Find a Reputable Gold IRA Company

Protecting yourself from fraud is an essential part of any investment strategy. Working with reputable companies reduces the risk of scams and gives you a better chance of safeguarding your investments. If a Gold IRA interests you, speak with your financial advisor for resources to help find a reputable company to partner with. 

One of those companies is Advantage Gold. We’ve been one of America’s most trusted Gold IRA companies for years, helping guide customers toward self-directed IRA solutions that work for them. If you have questions about opening your Gold IRA or how to avoid scams as you seek out assets for it, contact Advantage Gold today for a free Gold IRA guide.