Institutions and individual investors, and even countries, are pouring their money in gold. And why not? These are uncertain times and gold has been a safe investment since Ancient Egypt and beyond. It is the world's longest going true currency, and offers protection against a global inflation impacting paper money, and the U.S. policy of money printing or "quantitative easing".
As more investors chase the impressive returns on gold, there are more scams and fraud cases emerging. Whether it is a fake website, false buyer or seller, fraudulent gold mine or shipper, or gold company representative, there are endless ways that criminals are trying to convince buyers they have an attractive offer. Once the money is sent to these scammers, the deal is done. Gold scams can be complex and difficult to detect. Criminals know that more people are looking to cash in on gold, so there are now endless ways that scammers target their victims.
Gold scams are the most common in countries like Ghana, South Africa and China. However, international investigationcompanies and law enforcement emphasize that such scam and fraud cases can impact anyone and be operated from anywhere. Even sophisticated hedge funds and investment analysts can be fooled. It pays to be skeptical when investing in gold.
In 2011 the complaints of investment fraud increased by 8 thousand complaints at the Federal Trade Commission in the U.S. Experts say that gold scams in particular have shot 84 percent last year compared to 2009. West Africa is a large producer of gold, and also a high risk fraud region, so it can be a dangerous combination. How long will the scams be a threat? Experts say as long as gold prices continue to rally, criminals will target potential victims. Gold prices are expected to remain high for quite some time, due to the Obama administration's decision to continue printing money and not dealing with the dangerously high debt levels of the United States.
Precious mineral transactions are not regulated by the Commodity Futures Trading Commission (CFTC) or the National Futures Association (NFA). Gold scammers use these claims to get your confidence and are part of their scam approach, in some cases. In other cases, scammer claim to be a legitimate gold mine or seller in Ghana. The Precious Mineral Marketing Company (PMMC) in Ghana is the institution that protects the investor from Ghana scamsinvolving gold, and all exchange of minerals should be made through them. Traders or companies can contact this government agency to verify any claimed gold dealer, minor or shipper in West Africa.
As with any investment, be skeptical of claims that promise the gain of large sums of money with little or no risk. If you are a seasoned trader or investor, you know there's no such thing as a free lunch, especially in the financial markets. When possible, invest in gold bullion direct from a reputable gold seller in the United States, such as Blanchard or Northwest Mint.
A. Hathaway has 20 years of experience in global fraud prevention, international investigation and background checks for corporate and individual clients. He serves as a consultant for investigation firms in the Americas, Europe and Asia, and has been a senior investigator for cases in over 30 countries. He is considered an expert in risk mitigation and global due diligence.