- On May 10, 2016
There are five things you must know to avoid scams before you buy or sell gold, advises Michael Fuljenz.
The recent increase in the price of gold may increase the chances of unwary gold coin and bullion buyers and sellers becoming victims of fraud by dishonest dealers, cautioned Michael Fuljenz, an award-winning precious metals writer.
“It happens virtually every time there’s a runup in gold and silver prices. Scam artists take advantage of gold coin and bullion investors and consumers who have not done their homework,” warned Fuljenz.
“Last year when prices dropped, there was still so much public demand that the United States Mint ran out of some bullion silver and gold coins inventory several times causing numerous complaints. I anticipate demand will rise even higher from 2015’s impressive levels. Investors should know how to get more value when buying and more money when selling,” Fuljenz stated.
He said there are five danger points to avoid gold fraud:
- Paying far too much when you buy popular gold coin items, such as American Eagle and Canadian Maple Leaf coins. Depending on the quantity of your purchase, Fuljenz advised you should only pay between 4.5 and 5.5 percent over the intrinsic (“melt”) value of a typical, one-ounce gold bullion coin. Premiums above melt value may reach as high as 14 percent when purchasing smaller-size bullion coins that contain only one-tenth of an ounce of gold.
- Receiving far too little when you sell. Depending on the quantity and quality of coins you are selling, you should receive as least melt value for popular, one-ounce gold bullion coins and usually significantly over intrinsic value for rare coins. Several years ago, Fuljenz assisted news media in five states with investigations of so-called ‘hotel buyers’ who often paid just pennies on the dollar for some precious metals items. In one case, a high-profile buyer offered only $60 for a gold coin with a market value of $10,000 that Fuljenz loaned to investigative reporters who worked on the stories. This type of coin complaint has been described by many reporters as coin fraud or a rip-off.
- Not receiving what you paid for. Fuljenz pointed out there have been recent news media stories of complaints in Orange County, California, and Austin, Texas, about scam-artist precious metals dealers failing to deliver the gold bullion coins investors ordered in good faith. Coin fraud lawsuits rarely recover funds in coin fraud cases like this.
- Not receiving payment for precious metals items you shipped to a buyer.
“Before you buy or sell with a dealer, check to see the dealers’ credentials. Are they a fraud or are they accredited by the Better Business Bureau? Are they truly experts? Civil coin lawsuits rarely recover funds from criminals and scammers.
- Beware of counterfeit American Eagle gold and silver coins and fake bullion ingots (bars). “Even though hobby protection laws have been strengthened and counterfeit detection efforts in the precious metals and rare coin profession have increased, it pays to make sure your specific dealer is an expert in counterfeit detection,” said Fuljenz.
By following these five tips you can reduce the chance of being ripped off by gold coin scams.
About Mike Fuljenz
Universal Coin & Bullion President Michael Fuljenz has won more than 50 prestigious national and regional awards and honors for his consumer education and protection work in rare coins and precious metals, including Book of the Year. He has taught counterfeit detection classes at American Numismatic Association seminars, and was recently awarded an Honorary Doctorate in Humane Letters by McNeese State University. A respected community leader in his hometown of Beaumont, Texas, Mike also has served with distinction as a consultant to the Federal Trade Commission, United States Mint and Royal Canadian Mint, and is on the Boards of Directors of the influential Industry Council For Tangible Assets, Numismatic Literary Guild and Crime Stoppers of Beaumont, Texas.