Gold IRA is a great way to save up and invest for the future. It leverages the prospects of gold investment and the security that comes with being a part of an IRS-regulated savings and investment scheme. Furthermore, it is a proven way to protect your finances. Some of the ways that it does this are as follows:
- Through portfolio diversification
- Serving as a hedge against inflation
- Portfolio insurance
- Offering tax privileges
- Long-term growth prospect
A savings and investment scheme that can guarantee all of the aforementioned is worthy of serious consideration. For this reason, having and running a gold IRA account has become the go-to option for many. You can click here for more information on this subject.
Be that as it may, there are gold IRA scams that should be avoided. Knowledge of the various ways that these scams can play out increases the chances of avoiding them. Fortunately, this article intends to fill you in on some of them.
How to Spot and Avoid Gold IRA Scams
Some of the common gold IRA scams and how to avoid them are disclosed below:
Unrealistic Promises
There is no risk-free investment. This simply means that there is the possibility of losing, as well as gaining – which is every investor’s expectation.
More often than not, unrealistic promises are one of the signs of an investment venture that is too good to be true. So, you should watch out for such and even avoid them.
Unscrupulous Dealers
Frankly, unscrupulous dealers can appear in various forms. Some of the ways that they can appear are as follows:
Overcharging
These do not sell fake products. However, they make their victims pay more than the market value for purchases. Furthermore, they do this in such a way that appears that their services are cost-effective and client-centered.
This is why you need to be abreast with the market’s rate and general happenings. For the record, these are not just details that dealers, custodians, and other service providers in this line of business should be privy to. By and large, knowledge of these things ensures that you are not cheated.
Substandard/Counterfeit Products
The IRS (Internal Revenue Service) is very stringent when it comes to eligible precious metals. For starters, there are only four accepted precious metals that can be invested in – gold, silver, palladium, and platinum. Furthermore, these precious metals need to meet certain purity criteria.
On that note, you should know that some dealers sell precious metals that do not meet these purity standards. Rather, products sold are substandard or counterfeit.
On the whole, the solution to all these is ensuring that you choose a reputable company. This calls for doing your due diligence before making your choice. For more information on this, you can visit: https://www.ftc.gov/.
High-Pressure Sales Strategy
Every salesperson intends to close deals by successfully selling products and/or services. However, the sales strategy matters. For starters, deciding to buy a good/service is always going to be your choice.
As a result, a high-pressure sales strategy often means that there is something fishy. For this reason, you should avoid options that make it seem like you are obliged to accept their offer. This is especially true if the company in question does not make it a point of duty to provide all the necessary information.
In the spirit of avoiding such, ask the right questions and ensure that the right answers are provided. Also, always realize that decisions are not always meant to be taken on the spot. You need to think things through sometimes.
Unlicensed/Unregistered
There are first points of call before deciding to trust any service provider in this line of business. High on the list is the need to verify licensing and registration status. Options that are not licensed and registered should be considered a no-no.
It is difficult or even impossible to hold such service providers accountable. The fact that they are not regulated by pertinent licensing bodies is the reason for this.
Secondly, such service providers are not likely to comply with regulatory standards. The difficulty or impossibility of holding them accountable is a major reason for this.
Thirdly, it is easier for such companies and dealers to take undue advantage of their clients. You are to therefore avoid unregistered and unlicensed companies for these reasons and more.
Hidden Fees & Charges
The gold IRA market is quite competitive for companies and service providers in this line of business. It might interest you to know that new players keep entering the scene.
The intense competition is why some options entice prospective clients with ridiculously low offers. However, the problem is how some of them include outrageous hidden charges. While these companies provide actual services and sell actual products, this tactic makes it a scam.
So, you should not only be focused on checking the registration and licensing status of service providers. In addition to that, you should specifically watch out for scams in the area of hidden fees. The solution is for you to understand fee structures before deciding to commit to anything.
This requires reading the fine print in agreements drafted by these companies. Unfortunately, a lot of people merely take the words of dealers and companies in this line of business for it. Well, this is not enough as this scam tactic can be engaged.
Storage Scams
Storage services are one of the major loopholes exploited by many companies that intend to scam their clients. Some of them hand over the highly sensitive task of precious metal storage to below-par storage facilities. More often than not, these are options that are not well-insured and secure.
As a result, you have to research the storage facility or facilities suggested. This way, you can be certain of your precious metal assets being stored properly.
Misleading Advice
Many people consult online reviews in the bid to make the right investment decisions. This is a good move. However, you should be conscious of the platforms consulted for this purpose.
The reason is especially because some platforms are biased in their reporting. For example, a platform may advise that you consider the wrong company simply because it is partly sponsored by that company.
Furthermore, some scam companies have a way of having people say remarkable things about them on credible review platforms. This calls for reviewing the profile of those who leave comments on these platforms.
Pyramid/Ponzi Schemes
People have become more aware of the financial dangers of investing and partaking in Ponzi schemes. But just in case you are not aware of the dangers involved, you can check this article for information on this.
As a result, some of these schemes are disguised as gold IRA investment ventures. As with all Ponzi schemes, difficulties getting new investments to serve as returns for current investments signifies the end of business operations. The question is therefore how you can identify such.
For one, make sure your chances of getting returns on investment are not based on your referral of their services to other people. This should be considered a deal breaker.
Offshore Scams
Only consider companies that are regulated by local regulatory bodies, such as the IRS. Some companies claim to offer offshore investment opportunities. As a result, they are not bound by regulations and guidelines set by local regulatory bodies.
Well, this is one of the regulatory loopholes exploited by companies that intend to scam unsuspecting investors. As a result, you are not advised to consider offshore gold IRA investments.
Conclusion
There are several benefits of saving and investing for the future through the gold IRA scheme. However, you also need to be mindful of scams out there and the various ways they may play out. This is why this article has filled you in on some of them. Make sure you are not caught off guard as an investor.
