Is Gold a Good Investment? Maybe, but Beware of Gold Scams
It may be hard to explain some investment advice. However, one asset that doesn’t seem to be so hard to understand is gold. After all, it’s always worth something. Gold seems ideal to have in your portfolio (and also as a hard asset) during inflation. During times of trouble or economic decline, people have traditionally felt comfortable having a few gold coins around.
Gold may seem like a common sense investment thesis. However, it is ripe for scammers and is bait they use to attract new investors. Since gold doesn’t seem like a super-risky investment you have to be a technical genius to explain and understand, it has instant appeal, especially for mature investors. Also, gold seems like a safe, solid investment. The polar opposite of a crypto scam or other types of speculative broker scams.
When Gold Digging Meets Pig Butchering
However, for every good idea, there is a counterfeit version. This is also true of gold scams. In the past year, authorities have nabbed a crime syndicate in China that was responsible for a myriad of online financial frauds. One of them was a pig butchering gold scam.
If you haven’t heard of pig butchering scams before, they refer to investment schemes that aren’t out to simply make a quick buck. They want to lure people in and nurture them as traders. The fraudsters encourage their clients to make more and more deposits, give them bonuses, and show fake gains for their holdings.
They complicate withdrawals by looping them into agreements to trade money for a certain amount of time before they can withdraw it. However, they will never be able to withdraw it, because when the account or the “pig” has been fattened, the broker will take the fat accounts to the slaughterhouse.
This pig butchering scam focused on attracting people who wanted to trade gold. They knew they were dealing with a more risk-averse crowd, so they counterfeited a bank’s website and created a clone version. The clients thought they were dealing with a reputable financial firm. Then they offered gold trading through MetaTrader 4, usually a platform that is offered only by legitimate brokers and trading platforms.
With so many false assurances, it’s no wonder that clients weren’t nervous about handing them sensitive information, such as social security numbers and photos of their IDs. With this data, they could also hack into customers’ accounts as well as steal the money they deposited for fake gold trading.
Staying Safe from Gold Scams
This is scary. Usually, we associated these sleazy tactics with crypto scams or other types of scam brokers. However, every type of asset and scheme has its fraudulent versions, and gold is no exception.
In fact, the Commodity Futures Trading Commission (CFTC) issues warnings specifically about gold scams. Avoid any trading scheme that:
- Has no license
- Is using a site that doesn’t have the right URL
- Publicizes a trading thesis that is widely known
- Creates a false sense of urgency
- Asks for excessive identification documents
- Charges huge fees for physical gold storage
- Makes big promises about returns
- Offers a loan so you can trade more
- Offers fake bonuses so they can excuse not making withdrawals
- Urges you to put more money into your trading account
- Hesitant to allow withdrawals
- Poor communication or disappears suddenly.
Can I Get a Chargeback from Gold Scams?
If you hold an account with a broker that behaves this way, close your account and make a withdrawal immediately. If they give you trouble, contact a fund recovery service. The type of fund recovery service you need depends partially on how you funded the account. For instance, you may need a credit card chargeback or a bank wire recall.
If you’ve made a payment using cryptocurrency, crypto recovery experts can use advanced technology to trace transactions on the blockchain and create crypto reports that detail the path of funds. These reports can persuade law enforcement to pursue your case and improve your chances of crypto recovery success.
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