Scam artists know that when people get scared, they often don’t think straight. That’s why many of them are able to hook potential victims by sketching out a frightening, apocalyptic scenario in their sales pitches: The economy is failing! Global instability endangers our planet! The pandemic threatens our way of living! They use exaggerated fears to convince customers that only their product can protect them from the coming Armageddon.
Precious metals scams are notorious for this kind of anxiety-based appeal. In these illegal operations, boiler room salespeople persuade victims that they should move their savings out of safe, traditional investments and into gold and silver coins.
These coins, the scammers say, will keep your hard-earned money safe when the economy (or the environment or the health system) inevitably collapses. On top of the bogus pitch, the sellers sneak in undisclosed fees, and the coins, often falsely advertised as collectible, are marked up as high as 300 percent over the value of the metal. Those who invest via these scams lose much of their money the moment they make the transaction.
“These scams prey on the concerns that senior citizens may have relating to the economy, their retirement and their financial well-being,” says Joe Rotunda of the Texas State Securities Board.