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Precious Metals Scams Target Investors Amid the Pandemic

Crooks take advantage of dire times to fleece the anxious

spinner image cartoon of man wearing a sandwich board that says the end is nigh and ringing a bell in the other had he holds a sign selling gold coins
Chris Gash


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.

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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. 

In the biggest case of its kind, the federal government and 30 states sued a boiler room dealer called about a year ago on charges it defrauded at least 1,600 customers around the country out of $185 million.

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The company’s salespeople would tell investors that the market was due for a major crash and falsely warned them that the government could then seize their assets, the lawsuit says. The salespeople hid large markups and acted illegally as investment advisers, according to regulators. A federal court appointed a lawyer to take control of the company’s assets.

In separate 2021 cases, securities regulators for Texas and Alabama both ordered two other precious metals sellers to stop what the states called illegal advisory schemes, accusing them of trying to scare investors into funneling their retirement money into overpriced coins.

Have questions related to scams? Call the AARP Fraud Watch Network helpline toll-free at 877-908-3360. For the latest fraud news and advice, go to

Beyond metals

Precious metals scammers are especially adept at using apocalyptic threats in their pitches, Rotunda says, but salespeople for other shady investments don’t shy away from this kind of cataclysmic appeal. In Georgia, a man named Kenzley Ramos solicited investments online for his supposed foreign exchange trading pool, saying that the “stock market is crumbling” and that investors could “profit off the coronavirus” through currency trading.

The Commodity Futures Trading Commission said in a lawsuit that Ramos did not have a trading account and took the investors’ money for himself. In July, a federal court ruled he must pay more than $27,000 in restitution. “When you feel deeply afraid, you’ll do almost anything to get out of that state of being,” says Marguerite DeLiema, a professor at the University of Minnesota.

Protect yourself

Experts say there are steps you can take to dodge these emotion-based scams.

The golden rule for all unsolicited phone pitches is to hang up, take a deep breath, give yourself a day or two to think things over, and consult with someone you trust. Heavy pressure from the salesperson to act now — or a claim that the offer absolutely expires at midnight — almost assuredly is a sign that the pitch is fraudulent.

“Slow down, especially when you’re feeling fearful,” DeLiema says. “Nothing has to be done within that same second. You can get a second opinion.” And if someone is trying to sell you an unknown investment, consider contacting your state securities regulator before saying yes, Rotunda says. “We’ll be able to provide some guidance and some insight. We’ll let you know whether or not parties are registered, whether they’ve gone through examinations, whether they are licensed.”

Editor’s Note: The AARP Bulletin and AARP The Magazine accept advertising from gold and silver retailers who submit documentation for review and work directly with AARP if consumer-related issues arise. Companies accepted to advertise with AARP meet all regulatory requirements.

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