How’d they do it? By agreeing to pay up to $4.5 million to its former, disgruntled customers.

Gold Line was taken to California’s Superior Court after 19 consumer complaints were filed as a lawsuit in Santa Monica. Gold Line was accused of “bait and switching” customers, by luring them in with catchy bullion prices, then selling them on marked up numismatics. Sometimes the mark up was as much as 50%! If you read our previous article, you’ll know why that’s just down right criminal.

Gold Line didn’t get away with it scot free by just agreeing to a multimillion dollar settlement. They are now under surveillance from the state of California who will be recording phone calls, meeting with company executives, as well as “secret shopping” their business as they please to ensure lawful practices. Gold Line stated that these measures would “enhance its industry-leading disclosures to prospective precious metals buyers.” 

As we’ve talked about here at Gold Scams before, numismatics can be risky when it comes to investing your wealth into precious metals. If bullion dealers are marking up the price over 7% on numismatics and selling you on their rarity and safety, find another dealer! Gold Line has been one of the greatest recent examples of everything you don’t want in a bullion dealer. I’m still baffled on how they plan to stay in business with a reputation like that. With all of the dealers across the country, continent, and world I’m sure investors can find a more ethical and trust-worthy place.

When purchasing gold and silver bullion you are most likely motivated by the spot price, or market driven price, of your desired commodity. However, when it comes to purchasing your physical bullion there’s a little thing called a “premium” that can increase your overall purchase by a significant margin.

In an ideal world you’d get what you paid for at the intrinsic price, but in the wonderful world of business and economics the product must be processed, shipped to a wholesaler, then sometimes to a retail distributer, and finally to your bullion dealer. Precious metals are no different than the shirt on your back and the iPhone in your pocket. There’s a “premium” or an additional cost to bullion above and beyond the market value of the precious metal commodity it contains.

Premiums can also vary in the type of coin or round. Even at the same weight, the price could differ. An American Eagle can have a higher premium than let’s say your run of the mill one ounce round because of wholesale pricing, demand, and condition.

But what is a fair mark up on an ounce of gold or silver?

In the industry anything below 7% seems to be a fair markup. Or at least that’s what the market seems to be spouting. So before adding in your tax on the purchase (which is isn’t a problem in some states) you also need to add the 5-7% premium to the current spot price to find what you’ll actually be paying for the metal. If you’re purchasing from a dealer that is tacking on more than 7%, you should reevaluate. Might I add, that even 7% is the high end of the fair premiums. There are plenty of places online and near you that can probably offer you a much better price.

For more advice on how to shop for the best bullion dealer, read Peter Schiff’s latest Gold Scam Report.

Happy buying!

-Megan

 

NumberSleuth.org took on the ever interesting task of breaking down the life of gold, including where it is, who has it, and where it’s going. Some of the facts pulled from this beautiful graphic are astonishing.

Did you know that all the gold in the world could be broken down to 5 golden rings per person on the planet? Or that contrary to most of you reading this, jewelry is the main use of gold, not investments!

Click the image to see the entire graphic!

With gold becoming an increasingly popular topic of discussion within investing, now’s the time to learn all there is to know about this bullish metal. With knowledge of what its industrial uses are, as well as its largest producing country, can help you see dips and climbs before they come. As we all know the market can zig when you thought it might zag, but becoming in tune to your investment can help you make more educated decisions.

Reading Peter Schiff’s Gold Scam Report will do the same!

Happy buying!

-Megan

What is with people purchasing very important investments in shopping plaza parking lots?! I must stress that skepticism is your best friend when loading up your car at the local Target or Wal-Mart and you’re approached by a bullion dealer. The chances of a legitimate bullion salesperson meandering through the lot selling legitimate silver are very slim. However, to remain open minded, there are deals out there that you can score in one of those serendipitous moments.

In Saginaw, Michigan last week silver scammers were going door-to-door in shopping plazas with silver bars stamped with .999 pure silver on the back…the front sported a marijuana leaf. Police were tipped off that the silver was in fact only paint, and warned witnesses to not buy the faux silver and report the event immediately. Truthfully the “.999 pure silver” stamp in the metal could mislead knowledgeable buyers, but using your context clues as an educated investor you can avoid temptations as such by following the first rule of thumb, read the Peter Schiff Gold Scams Report. Then do a business background check on your salesperson. Whether it be through a simple google search or ask for their website, there are ways to find out the quality of business you are dealing with.

The most interesting part about this story is the “.999 pure silver” stamp on the back of the bar. The most suspicious would be the green marijuana leaf, not that marijuana is bad…but it’s not terribly often bullion is sold with colored paint. Although, that is possible. The “.999” stamp assures a buyer that the silver is of the highest quality. However, that wasn’t the case this time around. Another good thing to try out is getting a feel for real silver. Toss an ounce or ten around in your hand next time you have a chance. You can really get familiar with the weight distribution and feel for the metal. Although it’s not always the easiest.

By buying from a known bullion dealer you can lessen your chances of fraud. Private trades and deals happen in the bullion world. We realize this. However, avoiding sketchy scenarios like the one in Saginaw can assure your money goes into a safe, sound investment.

Happy buying all,

Megan

As gold scams pop up around the country and world we are providing you information in order to help you avoid becoming a victim of the scams. This time around it’s not the precious metal dealer that is scamming you. It’s the one rating the deceitful precious metal dealer.

Peter Schiff talked this month on his show on SchiffRadio.com about a suspicion he had about the Better Business Bureau (BBB) and their rating system. The gold scam of the year was undoubtedly the GoldLine fiasco, and with their trial taking place this month in Santa Monica, Peter decided to check and see what happened to their BBB rating. They were originally listed as an A+, now no rating existed at all. No F’s, not even a C! This wasn’t because they were disqualified all together from the site for their obvious fraudulent activity…the site’s reason for no rating was that there was “not enough information” to rate this company. HA!

Peter dug around to see what the BBB had to say about EuroPacific and was promptly met with a big F. This was due to one customer complaint, within one year, that had been filed; which was the ONLY customer complaint and/or rating that had been filed in total. So if GoldLine had a lawsuit on their hands, not to mention over 70 complaints in over 3 years on their BBB page, why wasn’t their enough information to rate their company? The obvious skepticism lead Peter to dig through numerous gold and silver companies that he knew were running scams, and wasn’t at all surprised by now to find that their ratings were not as poor as his.

His conclusion: BBB is taking payment for the rating listings, and GoldLine was keeping their rightfully smeared image under wraps.

Although we’ve listed in previous posts to double check a precious metal company’s ratings on various websites, we can now say that the Better Business Bureau lacks the integrity to provide accurate information for your buying experience. Have no fear, there are plenty of other ways to find out if the company you are working with is up to no good. Read Peter Schiff’s Gold Scam Report, and keep following our blog to stay up on the latest gold scams around the world.

Happy buying!

-Megan

This isn’t the first time an Irish passport has been used to forge a company and/or person’s existence. This time around it is believed that a group from Nigeria put together a massive gold scam that almost amounted to over €100 mil in gold from US investors. They told the investors that the unprocessed gold coming from African mines would be shipped into Europe and avoid fees, taxes, etc. Turned out that the gold didn’t exist with the company and neither did the head of the company, John Recketts. His passport number was linked to an elderly woman in Dublin whose passport was stolen.

The alleged scammers hired an Irish security team to bring the gold from Africa to Europe, but the team quickly found out that the name the operation was organized by was unreachable. They expressed their concern and immediately investors withdrew. However, this didn’t mean everyone was saved from the €100 mil loss. The Irish security team who made their way down to the border were left stranded without the pay promised to return home.

“We were cut loose — the minute they (the investors) realised what was going on they walked away. We had to pay all our own expenses and even our flights home,” said one member of the security team.

When dealing internationally and off the record (avoiding taxes and processing fees), be sure to background check who you are dealing with. Rookie buyers shouldn’t jump into international bullion deals, unless consulting with an experienced investor. I can advise that it is very risky placing faith in a company that you can not speak directly with or find proof of past business experience and ratings. International gold buying is inevitable in our global economy; be smart about your provider. And most of all, make sure they exist!

It’s not just the U.S. that is plagued with the cheesy gold-buying commercials and ridiculously priced gold coins. Canada also deals with their fair share of gold scams. With a very sizable gold investment conference around the corner in Vancouver, BC, it’s important that BC’s Better Business Bureau has created a Top 10 Scam List for 2012. And surprise, surprise…guess what made the top of the list? Gold scams.

As a con artist, you’ve come along way to take the cake in a contest that most businesses would like to come in last place for. Since gold’s stellar performance over the past couple of decades, criminal activity within the business is moving relatively higher. A correlation no one can ignore. With big money, comes the bigger scams.

The Better Business Bureau in British Colombia is doing our job for us in Canada. (more to come in a follow up post about the BBB in the States) They’ve voted Gold Scams as the number one scam to be aware of in 2012. Their suggestions to keep investors safe range from buying locally and finding an appraiser to see your gold/silver before you sell it physically. Run a search through your local BBB and they’ll feed you some good tips, but they also keep a running database, well they should, of past complaints and red flags on businesses in your area.

The BBB’s “Top 10” list gave quite a bit of competition, still gold came out on top:

-Penny Auctions
-Locksmith Fraud (eek!)
-Brand Spoofing
-Virus-Fixing Scheme
-Advance Fee Loans
-Power-Saving Claims

Looks like our friends in BC that have read Peter Schiff’s Gold Scam Report won’t have anything to worry about in the New Year. These trends are similar in the States with record numbers of scams happening everywhere. Your investing should be taken care of by people who understand your passion and goals as an investor, not a pushy salesperson calling from a musty boiler room. Avoid the scams by joining us to hear the latest.

Happy Buying,

Megan

Words spoken by Robert White, an appraiser, who checked out the inventory Nola Cronk had just acquired from  Capital Gold Group. Cronk approached an appraiser after having a hellish battle with what she thought was a move to protect her retirement.

Nola Cronk’s husband had passed away, and unfortunately he was the one who took care of finances, so she was soon left to her own to find the right place for the wealth she had left. She expressed interest in Capital Gold Group who quickly took advantage of this vulnerable client. They first asked for her financial records, assuring her after viewing that she need to act quick and move over $300K into gold. Then the broker who spoke with her over the phone, soon received a signed contract and a done deal through persuasive tactics that left Cronk seemingly helpless. Even when her buyer’s remorse kicked in and she asked to lessen the investment amount, she was met with, “You’ll either buy it or we’ll take you to court and we’ll get everything you have.”

Had Cronk or her family members known about Peter Schiff’s latest Gold Scam Report and/or this blog it may have prevented her from such a travesty. There are a few preventive measures that one should take when faced with a situation like hers.

From the sound of the broker she was dealing with on the phone, she should have been tipped off right away that something was fishy. His persuasion tactics and downright unsatifactory customer service is not something anyone should tolerate when investing in precious metals. This is your life savings and livelihood and should be handled with care, and by a caring person.

Also, before you decide to invest in precious metals, sift through your options. Nola Cronk knew she had some retirement money to invest, but what she needed to know was where are a few places that this could safely go? Finding the type of bullion you are looking for, for instance: American Gold Eagles or Canadian Maple Leafs, and having specific requests in mind will keep you from receiving offers about metal you are not familiar with.

What would seem to be no-brainers can easily be looked over when making a huge decision about investing. Your adrenaline is pumping, your mind overflows with questions, and your hopes and dreams lay in the distance, in hopes to be acquired after your successful financial decisions. In your head you are not thinking to ask the broker if you can record the phone call, what the return policy is on the physical metal, and you’re probably not thinking to Google the man or woman you are speaking too. Well today is the day you begin to make that mental check-list. If your over-the-phone-broker does not grant you the wishes you desire, in order for you to feel confident in your purchase, you are most likely buying from the wrong dealer.

Nola Cronk was eventually sent her precious metal, however not in the way she expected. She’s taken the Capital Gold Group to court, and they’ve been required to pay her in the sum of $67,000…however that money has yet to arrive. Don’t be another Cronk when making the decision to preserve your wealth in precious metals. Read the Gold Scams Report and share her story as well as the steps to smart gold buying!

When it comes to silver investments, purchasing high grade silver coins at 99.9% purity is the go-to business but do you know that people who buy junk silver can also benefit from participating in the industry? Junk silver coins are those that have been minted prior to 1965 and contain 90% silver. While they are not as valuable as pure silver coins, the high percentage of silver in these coins still merits enough attention to be considered a worthy investment.

For those who are unable to buy 99.9% silver coins, here’s a great alternative. There are actually quite a lot of these “junk” silver coins floating around, such as the Kennedy half dollar, Barber dimes, quarters, and half dollar coins, Mercury dimes, and silver dollars. Here are some tips and reminders to help you pinpoint which silver coins you should watch out for.

1. Nothing can be done properly without some degree of knowledge. Going in blind will mean the possibility of buying the wrong type of silver coins, or wavering over whether or not to buy junk silver coins. Someone could come and snatch up the silver coins if you show indecisiveness, and that would mean a lost opportunity for you. To help you out, look for silver coins minted prior to 1965, as they contain 90% silver and are good options. Some examples are Franklin half dollars, Walking Liberty half dollars, Barber head quarters, and Mercury dimes. If you concentrate on these silver coins, you’ll have an easier time focusing on a long-term plan instead of getting caught up with too many details.

2. Practice calculating the value of silver coins. The formula is simple. All you have to do is multiply silver content by the spot price. For instance, with 1964 Kennedy half dollars, you can multiply the silver content, which is 0.36169 by the spot price of silver at the time. Assuming a spot price of $40 an ounce, this coin is worth $14.47. Practice makes perfect, but before you know it, you’ll be well on your way to calculating accurate silver prices for your junk silver coins.

3. You’ll also notice once you start making the rounds that prices for the junk silver coin are commonly based on a multiple of the face value of the coin. Confused? At first, it can be difficult, but here’s an example: if a silver dime is selling at a face value of 30, you would multiply the face value of the dime (.10) by 30 to arrive at $3.00. One tip would be to ask the coin dealer to explain how he calculates his rate. If he has nothing to hide, he will explain it without hesitation.

4. As a buyer, you should also know that the face value quoted typically applies the same to dimes, quarters, and half dollars; however, it’s common for the face value quote of silver dollars to be higher. This means that whether you are purchasing half dollars, quarters or dimes, it will always be in reference to the “prevailing” face value which in turn is based on the silver price.

5. Now that you have an idea of how the market works, you can start looking at potential junk silver coin bargains. You can buy junk silver coins in smaller lots or in bulk, such as $100 and $1,000 face value bags. A bag of Kennedy half dollars in $1,000 face value bags at 30x face value will cost you $30,000 to purchase. Consequently, for an increase in face value rate to 30.5, you’ll receive a $500 profit on your investment.

..If you’re unable to find a coin dealer locally that you’re comfortable with, don’t hesitate to go online to find a reputable coin dealer from whom you can buy junk silver coins. Just remember to calculate the silver value of the respective coins prior to buying junk silver coins so that you can approach your purchase with reasonable expectations.

Originally posted here. 

This holiday season, I came up with a not-so-original idea to buy (or give from stock) silver* as my trademark gift. Not only is it an educational tool that brings up questions about investing and the future of the dollar-based system, but it’s also worth a nice chunk of change. As we speak I’m packing for a family get together where I’ll be presenting my father with a nice 1 oz. bar of silver. It’s worth cash if he wants to cash it in, possibly even more cash if he wants to hold on to it for a while, and is a great collector’s item if he chooses to see it that way. I’m sure he will be thrilled!

The average spending habits of individuals, around Christmas, add up to about $650. If you take today’s silver prices and divide that up, you’ve got a gift for over 20 people on that list. Just think, people are getting gift cards, scarves, new socks, and toys (all wonderful and thoughtful, of course) but when they open your gift, even if they don’t appreciate it in the moment they’ll hopefully realize soon enough that you’ve given them something to learn from.

Let’s not forget though, with the economy at its worst in decades, there will surely be deals on silver out there that are so good you should avoid them. An article I recently read offers up the great idea of buying your silver or gold through a local coin shop. I wholeheartedly agree that having your precious metal physically in your possession after the transaction can be soothing and exciting! However let’s not discount the growing popularity and convenience of online shopping. Buying expensive items online can feel like risky business, however with the secure pay options and things like PayPal, your $650 in silver rounds should be a safe precious metals buying experience.

One thing to make note of…be sure that your online bullion dealer delivers to your house. Do not purchase gold or silver for someone for Christmas if it’s going to be held in a vault or account somewhere. First, because it’s tacky to not have the gift present, and second, because one little round probably won’t be enough to have its own safety box. A company that offers to hold the PM’s while issuing a certificate should be checked out thoroughly to make sure the metal is actually in existence.

The good thing about online bullion buying is the lack of salespeople pulling you in different directions over the phone as you make your purchasing decisions. However, beware of websites with red flags like “confiscation proof” labels or hype over a government-issued collector’s coin. Before your start hunting for the best deals on your silver gifts, find the scams out there before they find you; dig into Peter Schiff’s Gold Scam Report that will make your gift buying holly-jolly like the rest of the season!

Believe me, your friends and family will love the gift that keeps on giving!

Happy buying,

Megan

*silver can be replaced throughout this article for gold, however you’ll be spending a WHOLE lot more per person!