Warn Parents About Gold and Silver Coin Scams

Here’s another tricky topic for the whole family this holiday season: the gold and silver scam. The Quartz investigation detailed these scams , as a result of which pension funds are converted to volatile investments in precious metals. Gold and silver investment scams are nothing new, according to Quartz, but they’ve targeted conservative seniors on Facebook for the past two years.

Facebook has since cracked down on abusive ads, but here’s how they worked: The scammers targeted ads at Americans 59 and older who showed an interest in conservative politics. These advertisements, which mostly drove viewers to a website called Metals.com, touted gold and silver as a way to protect your retirement savings from an impending economic crisis or harsh action by Democrats in Washington. After providing information on the Internet, people received phone calls and text messages warning them to “protect” their retirement accounts.

In the end, pushy salespeople forced people to transfer money from their retirement accounts to more volatile precious metals investments.

Here’s one example of how falling into one of these scams has dramatically reduced the value of a woman’s retirement savings:

She eventually agreed and, at the direction of the seller, she said, transferred $ 83,000 of her retirement savings into an independent IRA, a special type of IRA that allows for a wider range of investments, including precious metals. … Then, with the help of a merchant, her $ 83,000 was used to buy silver coins from Chase Metals to be stored in the IRA. Separately, she bought $ 60,000 worth of coins, which she brought directly to her home.

When she checked her IRA balance online, she said, it turned out that instead of the $ 83,000 she expected to receive, her holdings were worth less than a third of that amount. This is because the price of the coins she bought was much higher than the value of the precious metal they contained.

To recover some of the money she had lost, this woman sold some of her silver coins back to Chase Metals, but at a lower price than she bought them.

Investing in precious metals is good at its core, but it’s not something you can get started without having a lot of knowledge first. In AARP’s coin fraud investigation , financial advisors said that it is sometimes okay to channel up to 5% of your investment in precious metals if you are truly looking to diversify .

But doing it over the phone is a big ban. A 2016 AARP report noted that legitimate precious metals companies do not make phone calls and that you should speak to a financial advisor before transferring any funds to precious metals.

If you suspect that you or someone you know has been the victim of a gold scam, Quartz suggests reporting it to the North American Association of Securities Administrators in your state; You can find your state office on this map .

You can also report this to your state’s consumer protection office .


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