Precious metals have always been part of the trade industry. And while the advent of the internet and online trading has increased the ability of traders to buy and sell goods around the world, it has also put them in greater danger of being scammed.
You'd like to think that the seller you’re in a transaction with would be trustworthy, but that's
not always the case. Sadly, there are those who are looking to take advantage of uninformed and inexperienced buyers.
You want to ensure you find the best possible deals for your money - without paying too high a price. And as such, here are some ways you can detect and ensure you avoid precious metals fraud.
1. Check The Reputation Of The Dealer
Much like with any investment and venture, due diligence is essential. This means that you have to do your research on the dealer you’re transacting with. To start, check with your local business bureau to see if there are any negative or positive reports about the company you are about to choose to work with.
You could also consider the number of years they have been in the business. The longer they have been operating, the better. This means that somehow, they have built an image and credibility for their business. Consider going over their website and checking their former clients’ feedback and reviews. That way, you can get a picture of how they do business.
In addition, the company you choose should not only have a good reputation in the industry but should also have the right credentials. As such, it’s recommended to work with a dealer that has been authorized to mint legal tenders, gold bullion, and collectible coins. Check on the company’s certification and licenses. If the dealer doesn't have a valid license, that could be one of the indications that they may be a fraud.
So, if you’re looking to buy
gold bars from NZ Mint, it’s recommended to read up and know all there is to know about the dealer you choose to work with.
2. Know Common Fraudulent Practices
In today's day and age, it's essential to stand guard against fraudulent practices. Some of the common fraudulent practices include the following:
Selling fake precious metals: This is when the seller tries to pass off something like gold or silver when it isn't, taking advantage of the buyer's lack of knowledge about precious metals.
To avoid this, always buy from a reliable dealer or through someone who knows to detect fake precious metals.
Selling precious metals at inflated prices: This is when the seller charges an amount much higher than what they are worth to take advantage of ignorant buyers who don't understand their value and rarity.
Selling damaged precious metals: The seller tries to get you to buy precious metals that have been scratched or otherwise tarnished so they can make money off something they couldn't sell in its original state.
Once you have better knowledge about these scam practices, you can be in a better position to determine them and avoid being a victim.
3. Review The Sales Pitch
Don't let a sales pitch push you into an investment when buying. If someone tries to pressure you into buying or selling gold or silver right away, it could be a red flag to look out for. Know what you're buying and the
price of the precious metal. The more familiar you are with the product, the better you will be to spot a scam when presented with it.
Moreover, be suspicious of unusual requests, like asking for payment by gift card or wiring money overseas. This is not something that happens in genuine transactions; if someone asks for these forms of payment, they might be committing fraud. Also, remember that dealers in precious metals do not usually ask customers to pay in advance without seeing what they're getting first.
4. Become An Expert In Precious Metals
Another way to help ensure you avoid precious metal fraud is to become an expert yourself. This means familiarizing and studying precious metals and how trading them works.
To name a few, here are some of the essential details and information you need to equip yourself with about precious metals:
Understand the worth of the precious metal, including the physical form or how it trades in the stock market.
The projected price trends in the future that’s based on past prices and trends. Knowing this allows you to spot scam transactions since a dealer who claims that an investment will gain value at an exponential rate like 20% - 50% in a short period is likely to be committing fraud
Know everything about certification of dealers, purity of the precious metals, grading sources and services, or
policies on precious metals that will help confirm a coin's grade and value as stated by the seller or advertiser.
Once you know the precious metal industry in-depth, it can be easier to determine and spot fraudulent incidents by asking your dealer questions about certification, prices, or purity.
Final Words
Precious metal scams happen, but they can be avoided. With the tips and insights presented in this article, you can be in a better position to assess your investment opportunities carefully.
That said, before pursuing any transaction, check the dealer’s reputation, familiarize yourself with the common fraudulent practices, review the dealer’s sales pitch, and become an expert on precious metals trading yourself.
