Scams & Gold
Because of gold's near unique qualities of high value, compactness, portability, and universal acceptance, it is targeted by scammers and fraudsters.
- Metric Tonnes
These people will buy or sell or trade large amounts of gold with you, and usually blind you with jargon terms to make you feel stupid, and stop you asking too many questions.
- Nigerian 419 Fraud Sani Abacha's Widow / Son
In a variation of this endemic e-mail spam fraud, the son, widow, nephew of the ex President of Nigeria, or and ex minister, has a large quantity of gold bars or gold dust, and they have selected you randomly out of millions of people to sell for them on 20% commission, but you have to send them money up front. Also known as an advance fee fraud.
- Non-existent Gold
This is a very common eBay fraud, because eBay make it so easy to remain anonymous. We helped avert a $1.2 million fraud attempt, which we were only aware of because the seller stole our images of a Krugerrand. See GoingFast3.
- Overpayment & Refund
An apparent buyer may make a purchase, and accidentally overpay, often substantially, and ask for a refund of the balance. This could be via eBay. For example somebody buys 1 Krugerrand, and "accidentally" sends a cheque for 100 Krugerrands. The seller posts the coin together with a refund cheque for the difference. The buyer gets a special clearance on the cheque, then his own cheque bounces.
- Stolen Bank Drafts
Fraudsters will arrange to buy gold, and offer payment by bank draft. It can be difficult to get a bank to check whether the draft is stolen, legitimate, or altered. Weekends are a prime time for this type of scam, as it gives the crooks a longer getaway period.
- Altered Money Orders
We have had buyers try to use fraudulently altered money orders to buy gold. The fraudster will obtain a quantity of genuine money orders each for a low value, possibly £1, and expertly alter them to much higher amounts. See above comment about weekends.
- The Intermediary
A fraudster will pretend to be acting an an intermediary or agent for some important person, for whom discretion, confidentiality, and anonymity or essential. The story concocted may be that a foreign embassy official or member of the aristocracy needs to sell one or more 400 ounce gold bars or kilo bars. The intermediary may ask the buyer for a cheque to show his principal, to reassure the principal that the buyer is OK, on the understanding that the cheque is not going to be presented or cashed. The conman then attempts to clear the cheque by special clearance. Some small-time crooks may settle for a small advance payment or loan towards their expenses.
- Professional Intermediary
To create an image of respectability, some fraudsters will instruct a solicitor (lawyer), accountant. or other professional, to communicate with the intended victim. The professional may be an innocent party, but may also be in on a conspiracy to defraud. Recent tightening of financial regulations should make in more difficult to fraudsters to set up such schemes, but may work if the professional is negligent, or taken in by the deception. The actual deception may involve stolen, forged or worthless cheques, or drafts.
- Import Duty & Customs Fees
We have had would-be sellers ask us to pay shipping costs, import duties, VAT, to shipping agents. We suspect that if we did so, it would be for dummy goods, and the seller would be able to retrieve the payments from the agents before we had time to check the contents. A form of advance fee fraud.
- Credit Cards & Courier Collection
We have had buyers arrange to buy goods using a stolen credit or debit card, and sending a courier, friend, Fedex, to collect the goods.
- Mail Order & Personal Collection
We have had people arrange to buy by mail order, then conveniently found themselves in our area, and decided to collect the goods in person before their cheque has cleared (actually bounced).
- Boiler Room Sales
Boiler room telesales frauds are big business for worthless penny share pushers. We believe that similar boiler room hard-sell operations also target victims purporting to sell gold or rare coins as "Investments". These scams usually involve fraudulent and misleading over-valuations of the goods offered for sale.
Many of the scams listed above could involve shares, cash, bank accounts, or other commodities other than gold. The reason that they may include gold is becasue it is a highly portable and liquid form of wealth, and many people are aware of gold's reputation as a safe haven investment.
Misleading Adverts about Gold
Gold Bar Stack
Gold Bars For Sale
Reverse of Heraeus 100 Gram Gold Bar
Bullion Coin Selector Page