In general, gold bars are a solid investment they hold their value throughout economic trends and appreciate over time. But that only applies when you actually know where that gold is being stored and that it’s safe. And if someone is asking you to suddenly cash out and convert your bank account into gold bars, you might’ve just spotted a gold bar scam, one of the most common investment scam types in existence.
Here’s what you need to know.
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How Does the Gold Bar Scam Work?
In principle, the gold bar scam hinges on the very fact that gold itself is monetarily stable. Fraudsters use the bars as a literal gold standard for investment opportunities or simple account recovery practices. Namely, most victims will get called from someone pretending to be working for a bank or a federal agency. They may claim that your Social Security Number has been compromised alongside your banking information.
To prevent any loss of funding, the scammers “suggest” that you withdraw your funds and use it to buy gold bars in the same value. Then, to further promote the idea of legitimacy, they will send a direct courier to pick up the bars and deliver them to a secure location for safekeeping. Alternatively, they may ask you to invest the money into a different account.
In reality, however, that’s where your money disappears alongside the scammers who orchestrated the scam.
Red Flags for Gold Bar Scams
The telltale signs of the gold bar scams don’t differ much from the usual fare of cash or investment scams:
- Posing as a legitimate entity or government agency: You’ll get a call from supposedly your bank or local government offices for criminal investigation or revenue reporting.
- Creating a sense of urgency: The call will suggest that you need to act immediately or risk losing access to your money.
- Instructions for silence: The scammers will never ask for clarifying information, but will also try to prevent you from contacting law enforcement.
- Asking for direct access to funds: This is the big sign and includes a stranger coming to your house to pick up what is potential hundreds of thousands of dollars in gold bar to move them someplace else.
What to Do if You’re Targeted
The first thing you need to do when you get an urgent phone call is to stay calm. Scammers prey on urgency and the confusion it creates to force you to make impulsive decisions.
If you do get a call from someone and think they’re impersonating an agency, look up their contact information privately. Do not use the same contact information they gave out over the phone or email. You can usually verify that your money is safe through official communication channels.
When you get an email or call that sounds suspicious (or too good to be true in the event of an investment scam), check with someone you trust like a family member or a friend to see what they think. Scammers usually isolate their victims to stop them from thinking clearly and preventing them from seeking advice and identifying the fraud..
If something is fishy about the call, disengage immediately. Scammers usually don’t want to spend too much time on a non-viable prospect so will quickly hang up and move on.
Finally, make sure to report the scam to the authorities (for the U.S., you can use the Report Fraud website from the FTC).
How to Avoid the Scam
One of the best ways to avoid the scam is to be responsible about your online behavior. Don’t click on suspicious links or answer emails that come from unknown senders. For banking information, recheck the address form to ensure it’s being sent from the legitimate bank.
If you get a pop-up on your PC that you think might be a part of a scam, use anti-malware software to scan your device and remove harmful background processes.
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When my sweet old grandmother got caught up in an Amazon gift card scam, I decided then and there that I needed to do whatever I could to inform as many people as possible about the grifters of the world. That’s what I do here – writing about modern scams so you don’t get caught out.
