MOBE Scam Tips – 9 Simple Tricks to Avoid Gold Dealers’ Scams

MOBE-Scam-Tips-9-Simple-Tricks-to-Avoid-Gold-Dealers-Scams

MOBE Scam Tips: Investing in gold is not only the best way to diversify your portfolio, it’s also a great means to stabilize your financial freedom—similar to what international central banks have been doing to strengthen economic disposition.

As paper currency has the potential to lose its value (and indeed collapse altogether), gold has stood the test of time. Stocking up on the glimmering yellow metal essentially preserves your paper value in metal form.

It is important to do a lot of research before plunging into this type of investment. Like most business ventures, it has risks that you need to be ready for.

You’ll come across a plethora of investment opportunities and sellers that will want you to stake your hard-earned money into buying their gold. They can be legitimate, however, without taking precautions, you might get involved into grave scams and you don’t want that to happen!

So before you shake hands and shout “sold!”, follow these 9 simple tricks to avoid being ripped-off:

1. Do Your Homework

Research helps you learn how and where to look for the best investment opportunity. This article is part of that homework. Before you set foot into the gold market looking to barter for bullion and bling, be prepared!

If possible, read forums and seller reviews from previous customers. Find out about the various fees and commissions they charge and make sure you fully understand the reasons for such fees.

As a first time investor in gold, you should pursue expert advice from credible sources. If it’ll cost you a small fee to seek expert opinion, so be it. You’ll lose a lot more if you make the wrong decision.

2. Say “No” to Numismatic and “Yes” to Bullion

Unlike bullion coins, the value of numismatic coins is based on their condition, rarity and mint date,; rather than the actual value of the precious metal that they comprise of. They are best regarded as collectors’ items and gifts.

According to the Gold IRA Investor’s Guide, “Bullions are the only kind of coins investors should buy.” Many uninformed capitalists have been tricked into buying numismatic coins only to later find out that the coins are not even eligible to be deposited into an IRA.

Dealers will try to convince you to pay more than you should for the “wrong type of gold.” In fact, they earn the majority of their profits by selling numismatic coins rather than bullion coins.

It’s plain and simple. Unless you are knowledgeable enough on numismatic coins and are happy to purchase the few that do appreciate in value, avoid speculating on them as they will be of no benefit to your self-directed IRA.

3. Avoid the Upsell

You’ve probably done upselling in your own business–selling extra or non-related items in addition to the product in question. It’s a common sales technique and one that you must be aware of when dealing with a company’s sales rep.

Let’s say you’re on the phone with a bullion company and you’re looking to purchase the “right” gold. What you’ll most likely find is that the sales rep is more interested in persuading you to buy numismatic coins instead.

They’ll begin to falsely hype up the value of the coins using certain words:

  • “Historic”
  • “Rare”
  • “Limited”
  • “Unique”

Hearing any of the above is definitely a red flag, so watch out. It’s likely you’re being duped into buying coins with no appreciation value at all.

4. Ignore Gold Certifications

This is another popular scam tactic used by bullion dealers to convince buyers into paying hiked prices for unnecessary certifications.

Collectors can have their coins graded and certified by professional organizations such as the American Coin Club Grading Service (ACCGS) and the Professional Coin Grading Service (PCGS).

In this case, the condition of the coin determines its grading. A 70-point Sheldon scale is used to assess how valuable a coin is—with the highest grade being Mint State 70 (MS-70). Such is a useful way for collectors to “label” their coins. For instance, a 19th-century coin graded MS-70 would have a much higher value than a coin in poor condition from that same year.

However, this type of certification is insignificant for an investor who is interested in buying new bullion as it should already be in a flawless condition upon purchase. This may seem overlooked by dealers in the interest of over appreciation of bullion coins, but be firm in avoiding them regardless.

5. Scrutinize the Slabbing

As with any product you buy, especially for something so valuable, be sure to inspect it thoroughly. Notice overly fancy covers or multiple layers of plastic that wrap around your precious gold product. All this will hinder you from examining the authenticity and condition of your purchase so you need to be careful.

Remember to make sure that the slabbing and coin go together. Invariably, fake gold does not include slabbing.

6. Analyze Impartial Grading

If you purchase bullion online (which in itself requires a lot of due diligence), request documentation on the impartial grading.

Credible and professional dealers will have this information. If the request is met with an “um” and an “ah”, there’s another red flag being waved right before your eyes.

Check with an independent source before you make your purchase. But when you do so, ensure that the third-party organization is in no way linked to the dealer. If they’re on the dealer’s payroll, you should look elsewhere for an objective advice.

7. Use a Magnet

A simple little trick you may not even have heard of before. However, it’s easy to determine the gold’s authenticity (or lack of, in some cases) by testing it with a magnet. Real gold does not react to it—if it does, it’s fake.

8. Avert from Leveraged Accounts

A leveraged account is when a dealer offers to lend you money so that you purchase more gold in addition to your cash investment. For example, if you purchase $10K gold, the dealer may offer you a loan of $20K so that you can purchase additional bullion to be stored into the account.

Let’s say you take up the above offer. You’ll now have $30K invested in gold, rather than your initial $10K. That sounds great in theory, yet if there’s a temporary 20% price drop in gold, your $30K investment decreases to $24K.

When this happens, the dealer that talked you into the loan will most likely need additional funds from you as a “margin call” to keep your account active. If you’re unable to pay the security fund, they’ll close your account, take their $20K loan back and leave you with the deficit.

Owning all the bullion minus the loan, you could just hold on to that gold and wait for prices to rise again.

If you still plan to have a go with a leverage account despite all the potential pitfalls you learned, make sure you completely read all the terms and conditions of the account. Don’t forget, there’ll be a commission charge for the entirety of the purchase.

9. Get Expert Confirmation

Before you finalize any potential investment, make sure you get comprehensive confirmation from a professional and reputable source. You can contact the CFTC (www.cftc.gov) or other authorities that specialize in consumer protection.

Don’t make rash, impatient decisions. You wouldn’t do so when running your business so the same should be when making an investment.

And Finally …

Protecting your wealth and investing in gold needn’t be a daunting prospect if you take the proper measures. Just keep in mind the above tricks and you’ll avoid the scammers with ease.

Always remember to make smart investments through investigation and inspection.

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About mobebusinessreviewswebmaster 57 Articles
Matt Lloyd is CEO and Founder of MOBE (My Online Business Education), an education company At MOBE, our goal is to become the #1 Small Business Training Company In The World!

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