The Top Two Most Common Gold Coin Scams - A Buyer’s Guide to Avoiding Pitfalls
When buying gold there are some serious gold coin scams to watch for. We will use this opportunity to outline some examples of common gold coin scams and what you can do to prevent them.
The Proof Coin Scam
Proof coins are manufactured differently than other coins. The manufacturing process used imparts a special finish on proof coins which is made especially for collectors. The uncirculated grades are from MS60 to MS 70, with MS70 being the highest grade possible and considered the perfect coin with no evidence of scratches or contact marks of any kind. Very few coins achieve this grade, and naturally, this grade commands the highest value and price from collectors.
This system of grading, although well known and used by dealers, is still open to fraud. If one does not watch or take due care and diligence when buying gold coins one could be easily duped in the grade of the coin. This is based on the fact that there is a big difference in the value of cons within the grading and usually only a professional can tell the difference in the grade of a gold coin. Do not rely solely on the coin grade presented - you may consider a second opinion if you don’t trust your advisor or have never worked with a particular advisor before.
The Counterfeit Coin Scam
Believe it or not there are counterfeit gold coins around. These can be spotted by a proper valuation. If you buy gold coins sight unseen and have them stored for you, you may be in danger. There is no way you can tell if the coins you bought ever exist. Your only security is the word of the company you purchased the coins from. The saying, ´a bird in the hand...´ comes to mind here when it comes to gold coin scams to watch for. Again, do not rely solely on the representations of the dealer - you may consider a second opinion if you don’t trust your advisor or have never worked with a particular advisor before.
The Solution
It really comes down to the precious metals advisor you are dealing with. The first thing to do to avoid buying coins is seek out a reliable and trustworthy precious metals firm. Make sure the firm is registered and has been in business for at least five years. Do your due diligence.
Do they have a fixed address?
How long have they been in business?
Are they registered with the better business bureau or similar organizations and associations?
Finally, does the firm have a return policy in the event that it is subsequently discovered the coin is of a lesser grade or value than advertised.
One should always take delivery of any coins one has bought. One can organize storage oneself and then sleep with the secure knowledge that one has, indeed, genuine gold coins of the advertised grade and value.
Remember - "take care of your money and your money will take care of you."
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