A Portland coin dealer is speaking out after one of his customers was nearly scammed out of $170,000 in a gold bar scam, reports KGW8 News.
Michael Kakoullis, owner of Portland Precious Metals and Coin, said the whole thing started when an elderly man called his store asking to purchase $150,000 in gold bars. The next day, the man increased his request to $170,000.
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“He asked, how soon can he have it? Can he just pick it up right away? And he wanted to wire the money. And a little bit of a sense of urgency in his voice,” Kakoullis told KGW8 News.
He ended up locking the customer in for 57 one-ounce bars, and the customer planned to visit the bank to wire the money.
A few days later, the elderly man and his banker called Kakoullis to tell him the order was cancelled — and that he was a victim of a scam. However, he still suffered a financial loss since he had a locked price and was on the hook for $4,000 in market price differences.
How to protect yourself from precious metal scams
According to Kakoullis, who spoke to the customer later, the man fell for a common — and very effective — gold bar scam.
“Initially they called him, said his Social Security number was compromised. Some people were opening up different accounts with his Social Security number, trying to launder drug money, stuff like that,” Kakoullis told reporters. “He was skeptical, so they had him talk to a sheriff from Washington, D.C., and they convinced him.”
While this customer narrowly avoided losing his life savings, other people haven’t been so fortunate. A Clark County resident recently lost $500,000 in a scam with nearly identical details — a stolen Social Security number and fake law enforcement officers.
“It’s evil. I mean, you’re taking people’s life savings. Especially … when you’re in your 70s, you don’t have time to recover from that,” Kakoullis told KGW8.
Gold bar scams are increasingly common, especially with elderly or vulnerable people who are pressured to make rash decisions.
Here are a few ways to protect yourself or your loved ones:
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Take a breath before making significant financial decisions. Scammers rely on fear and pressure to make you act before you have time to think it through.
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Never click on popups or websites you don’t recognize. Many of these scammers use popups to tell victims they have a computer virus or were implicated in a crime, then offer to help.
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Be skeptical of someone claiming to want to help you hide or protect assets. Law enforcement won’t do that.
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Don’t agree to buy gold or precious metals using “equity-based financing or leverage,” where you invest just a small part of the value that increases as prices rise, says the Commodity Futures Trading Commission. Keep in mind costs could fall, leaving you with nothing.
Investing in precious metals can be a smart way to diversify your portfolio, but being aware of scams can help protect your financial future.
Read more: Accredited investors can now buy into this $22 trillion asset class once reserved for elites — and become the landlord of Walmart, Whole Foods or Kroger without lifting a finger. Here’s how
How to safely invest in precious metals
Scammers often target people who are unfamiliar with investing in precious metals, so it’s essential to make sure you’re working with legitimate sellers. Here are a few rules of thumb to safely invest in gold and other precious metals.
Buy from reputable sellers
Stick to well-known, accredited dealers like those listed by the Professional Numismatists Guild (PNG) or the U.S. Mint. Avoid sellers pushing urgency or promising guaranteed returns.
Verify prices and fees before you buy
Some sellers inflate gold costs or try to charge huge fees. Before you buy, refer to the World Gold Council or another reliable source for gold prices. Be wary of excessive markups or hidden fees.
Store your gold securely
Never give gold to anyone, even if they claim to work for a law enforcement agency. Gold is like cash — it’s often untraceable and nearly impossible to recover. Instead, consider using a bank safety deposit box, private vault service or a home safe. Never keep large amounts in unsecured locations.
Avoid high-pressure sales or financing traps
Scammers often push leverage or financing deals with guaranteed results. It’s a trap — and sometimes illegal. Legitimate gold investments don’t require urgency, high-pressure sales tactics or hard-to-understand financing agreements.
Gold and precious metals are a legitimate way to invest, but they’re often used to scam people. If you want to invest in precious metals without the risk of being scammed, consider gold ETFs. These purchase shares in a fund that tracks the price of gold.
If you believe you or someone you know has been a victim of a precious metal scam, contact the Federal Trade Comission to report it.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.