by Stefan Gleason, Money Metals:
Investors today must navigate through a veritable minefield in order to keep their money safe from threats.
From small-time con artists to greedy executives at major financial institutions, there are all-too-many bad actors who aim to enrich themselves through lying, cheating, and stealing.
We’ve recently seen major players in the cryptocurrency space exposed as frauds.
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We’ve also seen major banks including JPMorgan Chase, Citi, and Deutsche Bank fined hundreds of millions of dollars for cheating clients and rigging markets. Banksters have even been caught opening up fake, fee-generating accounts for customers who did not ask for them, in the case of Wells Fargo.
Sadly, there are bad actors who operate within the precious metals industry as well.
Last month, the Securities and Exchange Commission (SEC) filed charges against a California-based company called Red Rock Secured for allegedly defrauding buyers of precious metals.
According to the SEC, Red Rock’s CEO orchestrated a “fraudulent scheme that involved convincing hundreds of investors to sell securities in their retirement accounts to buy gold and silver coins… at only a 1 to 5 percent markup. In reality, Red Rock charged as much as 130 percent in markups, which allowed them to pocket more than $30 million of the more than $50 million they received from investors.”
The company had aggressively steered customers who it sold on the idea of buying bullion into obscure coins that it represented as having numismatic value.
These coins may have been unusual, but the market value of these oddities turned out to be quite ordinary.
Red Rock apparently targeted politically conservative retirees in its bait-and-switch scheme.
So did a firm called Regal Assets, which stands accused of fleecing investors out of tens millions of dollars after failing to fulfill customers’ bullion orders.
Regal Assets paid for endorsements from conservative talk show hosts – whose loyal followers then got royally screwed. The plight of victims who lost their life savings was featured on a recent episode of Inside Edition as well as here at Money Metals.
In recent years, Goldline, Northwest Territorial Mint, Tulving, Merit Gold, Chase Metals, and other players in the retail precious metals industry have also been accused of cheating customers out of millions.
Our longtime readers and customers know Money Metals has always encouraged folks to understand the MELT VALUE of what they are buying (i.e. the actual spot market price of the metal) and compare that to the price for the item.
The difference between the spot price per ounce and the item price per ounce is called the “premium.” In general, the lower the premium the better.
Another lesson: Bullion investors who buy based solely on slick advertisements risk getting left holding the bag.
Take a few minutes to investigate a dealer’s online reputation before ordering. You should also expect the dealer to provide a firm estimate as to when the order will ship when the order is placed.
Customer reviews for Money Metals Exchange are overwhelmingly positive for a reason. Regardless of whether you’re a new customer with a small budget or an experienced stacker, you can buy with confidence from Money Metals.
There are other reputable players in the industry, to be sure. But Americans seeking to acquire low-premium gold and silver products should avoid dealers who pitch high-premium numismatic, proof, or “collectible” coins at all costs.
