AARP Article on Gold Scams

TigersFan2

Although old enough to join, I refuse to join AARP because I don't care where they make political contributions with the dues. But a friend has alerted to me an article they've recently published on "old people being scammed by gold dealers."

AARP Article

roadrunner

Numismatic gold coins getting a bad rap again. Blame the object, not the evil-doer.



You can just as easily buy fake gold coins, fake gold bars and ingots, and a dung heap of a mining company share(s).



And it would not be unusual to buy numismatic gold coins from dealer X, and take them down to any of your local shops and get offered X-20% to X-50% the next day. That's often how things work. Let's not blame it all on numismatic coins. The PM market was crushed from April 2013 to December 2015. And it's also easy to lump all the scammers and non-scammers into the worst PM market of the past couple decades. Mining shares fell 82-98%. Yeah, those would have been a good thing to be into (ie the numismatic coins at a 35% markup would have probably done better).



Scammers operate in stocks, bonds, currencies, commodities, real estate, and collectibles of all types. But reading these articles from time to time you'd think it was just gold and silver that are the "bad boys." Nope, old people never get scammed in real estate, reverse mortgages, refi's, life insurance, annuities, stock brokers, checking or savings accounts emptied, soc sec checks stolen, etc. It only happens from gold dealers.

roadrunner

Six months later, Clark began to worry. The price of gold had dropped more than $300. The salesman had assured her that these coins would help protect her from short-term fluctuations. How much were hers worth now? She didn't know. She had never received condition reports from Merit, just an invoice. And when she opened up her safe-deposit box and inspected her hoard, she saw that all the coins had different dates, and they looked dull and worn. Although Clark called Merit repeatedly to ask about this, she kept getting sent to voice mail.



So this person never initially inspected what they were sent? And a few months later they looked at the coins and were aghast because they had 1) different dates and 2) they looked dull and worn. So now they were full-fledged numismatists, by psychic ability I suppose. Why didn't they have these concerns upon receipt of the coins when gold was $300 higher? They bought the coins in December 2012 when gold was on the way down from the Sept 2012 high at $1795. I supposed the April 2013 crash from $1650 to $1321 probably got their attention. By June, $1180 was hit. Blame the market, not the seller. They bought gold at about the worse possible time. It's just simpler to blame the dealer. So what would AARP have recommended for this person as an investment in Dec 2012? Would AARP have recommended gold in 1999-2001? Not likely I suppose. AARP apparently is ok with paper gold like GLD. Have they investigated the chain of ownership and custodian/sub-custodians of that that fund? I suppose not.



A friend of mine, not a senior, bought gold and silver in August 2011 at $1750 gold/$38 silver. I cautioned them not to. They asked me for some reputable dealer names to buy from. Since they were dead set on it, I linked them up with wholesale levels on both so at least they didn't take an initial 5-10% hit. They got in on gold at a 1-2% mark up and silver around 2-3%. A year later in Sept 2012 when gold was over $1735 and rising, I suggested they bail out at the Long Beach show. They didn't want anything to do with that. By the end of that week it was over $1790 and they still didn't want out knowing they were at a slight profit. They held on for 4 years....all the way to the bottom. AARP would probably blame the dealers and gold.

bolivarshagnasty

I read the entire article a few moments ago in the AARP magazine. What I took from the article is that the companies in question were participating in bait and switch tactics. Advertise owning generic gold at a slight markup, and after gaining the interest of customers, hard sell numismatic gold as a better option. Instead of a 1% markup, they could markup numismatic gold 33%. Lying about investment "opportunities" is a crime in this country. We all know here that numismatic anything shouldn't be considered an investment. People in their 80's with no experience in such can be duped. Shouldn't be "buyer beware" if they are knowingly lying about the investment potential of numismatic gold. The companies in question conveniently filed for bankruptcy before any litigation could be brought against them.

TigersFan2

My viewpoint of the article is that it tries to scream "caution" and perpetuate the myth that everyone is out to rip-off senior citizens. The article was very short on facts and very long on anecdotes. If the writer wants to write an article on the scams in the numismatic business, they should begin with the tv shopping networks and the overpriced merchandise being peddled there with half-truths and hype.

Like the previous commenter said, scams abound anywhere where people are making investments.

291fifth

Originally posted by: TigersFan2
My viewpoint of the article is that it tries to scream "caution" and perpetuate the myth that everyone is out to rip-off senior citizens. The article was very short on facts and very long on anecdotes. If the writer wants to write an article on the scams in the numismatic business, they should begin with the tv shopping networks and the overpriced merchandise being peddled there with half-truths and hype.

Like the previous commenter said, scams abound anywhere where people are making investments.

The objective of many scammers is to rip off senior citizens with early stage dementia. These people are easily confused and are easy targets for slick talking pitchmen (or women.) In the past several weeks I have received two scam phone calls (both the IRS scam) and two email scams supposedly from banks. No, they didn't fool me.

This past weekend I was visiting my mother and she received the IRS scam phone call while I was there. No, she wasn't fooled either.

Scammers are scum and deserve to be treated as such.

ricko

There are scams all over, however, the gold, silver, coin markets seem to be rife with rip offs.

And, it is not just senior citizens being ripped off... I have personally known many who have been taken in all three areas.... and, as I have posted before, they get angry with the person telling them they have been scammed.... Cheers, RickO

PaleElf

All of those "buy gold" infomercials are a scam. Just look at the charts they use when referencing gold's future price appreciation. With stocks, you can generally immediately sell a share you purchased for around the same price you just purchased it (especially if you utilize some of the newer commission free apps). Good luck trying to sell numismatic gold right back to a dealer for around the same price you just purchased it at. That is what they do not make clear.

silverpop

they send me offers to join but I see no reason to join

Nap

AARP is nearly as bad. They have a major conflict of interest in being an "advocacy" group for older people while at the same time trying to sell them financial services and insurance. I don't know if the services are crooked or overpriced, but I suspect they are profit driven and not necessarily in the best interest of retired folks.