Gold is a popular investment option in retirement plans and other investment accounts. Unfortunately, this popularity has created an opportunity for unscrupulous dealers to prey on unsuspecting investors. Fortunately, there are ways to spot and avoid these common scams. Learn to recognize red flags of a potential scam by doing your research and by checking consumer reviews, company websites, and regulatory bodies. Avoiding Gold IRA Fraud: A Guide for Smart Investors will equip you with the tools you need to protect your retirement savings from fraudulent precious metal dealers.
High-Pressure Sales Tactics
Many Gold IRA scams involve high-pressure sales tactics. These scammers may try to scare investors by using alarmist rhetoric about economic collapse and pressure them into investing their entire IRA in gold. If a dealer uses these tactics, it’s a good idea to walk away.
False Credentials
Scammers often use fake credentials or false certificates of authenticity to pass themselves off as reputable Gold IRA providers. If a Gold IRA provider does not provide these documents, it is best to move on to another provider.
Inflated Prices
Inflated prices are another red flag of a Gold IRA scam. It is perfectly legal for companies to mark up their products, but they should always be transparent about these prices. A recent SEC case involving a Gold IRA provider highlights this issue, with the company’s markups reportedly exceeding 130%.
Hidden Fees
Many shady Gold IRA dealers hide fees in the fine print of legal documents or in other costs, such as transaction, storage, and administrative charges. These hidden fees eat into your potential profits and should be avoided at all costs.
Self-dealing
Some Gold IRA providers engage in self-dealing, which is illegal under IRS rules. For example, some custodians encourage IRA owners to purchase gold bullion from them and then store the coins at their home or other private location. This is a major violation of IRS rules and can result in severe penalties from the IRS.
Counterfeit Precious Metals
Counterfeit gold coins and bars are a growing concern for investors. These counterfeits can have serious consequences for your retirement savings, so be sure to invest with a reputable provider that has the proper authentication procedures in place.
Choose a Gold IRA company that offers segregated storage. This means the company will keep your gold separate from their own inventory, and it will be stored in an approved depository. Some fly-by-night companies promote “home storage” IRAs, which are a violation of IRS regulations.
When choosing a Gold IRA company, check their reputation by researching industry organizations and looking at consumer protection ratings and complaints. Also, consider a Gold IRA company’s membership in the Industry Council for Tangible Assets (ICTA) and Regal Assets, both of which require that the company adhere to strict consumer protection standards. Finally, choose a company that provides detailed, clear explanations of all fees related to your IRA. This will help ensure that you are getting the best value for your money.