Submitted by nsscadmin on
Fraud prevention month may have just ended, but our fraud warnings haven’t. During fraud prevention month the Nova Scotia Securities Commission shared warnings and information about impersonation scams, registered professional crypto trader scams, and fraudulent crypto trading websites. This week we’re warning investors about precious metals investment scams.
When we are talking about precious metals, we’re referring to metals like gold and silver that can be very valuable. In the investing realm they’re considered to be commodities, and like other commodities such as oil and gas, the price of precious metals can be volatile.
Despite this volatility, during economic downturns people running precious metal scams will heavily tout them as safe investments. You may see scammers proclaiming an economic meltdown is coming to make investing in precious metals seem even more appealing and again, sound safe.
Precious metals can be a legitimate and worthwhile investment. However, if you become a victim of someone running a precious metals scam it can be very hard or impossible to make any money on this investment. These dealers, many of whom are not registered, will often sell precious metals for much more than they are currently worth, and tack on other fees and commissions that make them a bad investment. Here are some of the red flags of precious metal investment scams:
• Uses cold calls or unsolicited emails to offer investments;
• Uses television, radio, and social media advertisements that promotes fears about the economy and traditional investments in favor of precious metals;
• Creates a false sense of urgency by claiming limited supply of a precious metal;
• Encourages financing the purchase through loans arranged;
• Advises investors to liquidate their pre-existing retirement investments to fund investments in precious metals;
• Fails to disclose their conflict of interests, commissions and fees in writing.
If you are interested in investing in precious metals ensure you are working with a legitimate, registered, dealer. Ask about fees and commissions included in any purchase you make. Check and double check the current value of any precious metal and compare it to the price being offered to you.
The Nova Scotia Securities Commission does not provide investment advice. We are not advising anyone to invest in precious metals. This blog post provides information for educational purposes to help investors make more informed decisions.