Posted in: Investing
How to Avoid Scams When Purchasing Precious Metals Online
As with any large purchase you make online, you need to be vigilant when purchasing gold and other precious metals over the Internet.Although the chance of fraud is relatively small, you will still want to be on guard for anything that may seem amiss. Also, as the price of precious metals rises, the number of people trying to make quick money through precious metal scams will increase. The following are some tips on avoiding scams when purchasing precious metals online.
Stay Away from Anonymous SellersWith the proliferation of sites like eBay and Craigslist, buyers are increasingly turning to these sites to try and spot a good deal on gold and other precious metals. However, because of the anonymous nature of these sites, they are best avoided. You will not get to view these coins before you purchase them and if you find they are defective upon delivery, you have little recourse, especially with Craigslist. Additionally, it is never a good idea to purchase precious metals—or anything else—from unsolicited email messages. Known as spam, these messages are sent out by the hundreds of thousands and are never legitimate. You will have absolutely no course of action if you purchase from these scammers. Just remember, legitimate precious metals dealer will never contact you unsolicited.
Look for Sellers Who Belong to Trade OrganizationsOne sign that you are dealing with a reputable dealer is by seeing what professional organizations they are a part of. These organizations have strict guidelines on who can be a member and businesses that are found to engage in fraud are either not let in or are kicked out of the organization. These memberships are a badge telling you that this is a business you can trust. One such organization is the well-known Better Business Bureau. Just because they are well-known doesn't necessarily mean they're ratings are reliable. When researching a business with the BBB, it's important to go beyond the rating and actually take an in-depth look at any complaints against the organization. Were they handled in a positive manner or did the business ignore the complaints? Every business will have things that sometimes go wrong, but you know you can trust a company that fixes these mistakes quickly and effectively.
The Benefits of Authorized DealersFor coin sellers, look to see if they are a Professional Coin Grading Service (PCGS) Authorized Dealer. To be an Authorized Dealer, the company must have been in business full time for at least three years, not have any key employees with felony convictions over the past five years, contain over $100,000 in inventory, have three credit references, and have at least three references from other Authorized Dealers. This extensive process lets you know you aren’t dealing with an organization that is going to disappear when you have a problem. These are just a couple steps to take to avoid running into scams when purchasing precious metals online. Most importantly, use your common sense. If something feels unsafe, it likely is. You are making a large investment and you want to make sure that your purchase will turn out smoothly.
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