Because of gold’s nearly unique qualities of high value, compactness, portability, and universal acceptance, it is frequently targeted by scammers and fraudsters.
Who Should I Trust? The answer is NOBODY. In our over 40 years of experience, we have encountered numerous cases where not only sellers or brokers, but also customs officials, major security and transport companies, airlines, police officials, lawyers, refineries, and even bankers were involved in scams, sharing the profits from their unsuspecting victims.
Assay: While not necessarily a scam, many countries use the Water Density Method to provide a formal assay of gold bars melted at the mine. However, gold as an alloy will always contain other metals, which can alter the overall density of the material being tested based on the mass and density of the other materials. Therefore, A GOLD will never accept an assay based on the Water Density Method or an XRF Analyzer (X-ray fluorescence, which measures the purity only on the surface of a bar) as the final assay result for payment. The only accepted assay for payment would be a Fire or Chemical Assay, where drillings from multiple points of a bar are melted and chemically tested for gold purity by our nominated and licensed assayer in the U.A.E.
The Intermediary / Mandate: A fraudster will often pose as an intermediary, agent, or mandate for some important person, for whom discretion, confidentiality, and anonymity are paramount, or for mines or traders of gold. The concocted story may be that a foreign embassy official or a member of the aristocracy needs to sell one or more 400-troy-ounce gold bars or kilo bars. The intermediary may ask the buyer for a check to show his principal, to reassure the principal that the buyer is legitimate, with the understanding that the check will not be presented or cashed. The con man then attempts to clear the check by special clearance. Some small-time crooks may settle for a small advance payment or loan towards their expenses.
Professional Intermediary: To create an image of respectability, some fraudsters will instruct a solicitor (lawyer), accountant, or other professional to communicate with the intended victim. The professional may be an innocent party or part of a conspiracy to defraud. The recent tightening of financial regulations should make it more difficult for fraudsters to set up such schemes, but these scams may still succeed if the professional is negligent or deceived by the fraudster’s tactics.
Import Duty & Customs Fees: We have received requests from sellers asking us to pay shipping costs, import duties, and VAT to shipping agents. We suspect that if we complied, it would be for dummy goods, and the seller would retrieve the payments from the agents before we had time to inspect the contents. This is a classic form of advance fee fraud.
Metric Tonnes: These individuals will claim to buy, sell, or trade large quantities of gold with you, often using complex jargon to confuse you and discourage you from asking too many questions. Their goal is to create a sense of intimidation and prevent you from uncovering their fraudulent intentions.
Nigerian 419 Fraud (Sani Abacha’s Widow / Son): In a variation of this pervasive email scam, the son, widow, or nephew of the ex-President of Nigeria, or an ex-minister, claims to have a large quantity of gold bars or gold dust. They randomly select you from millions of people to sell the gold for them on a 20% commission, but you are required to send them money upfront. This is also known as advance fee fraud.
Overpayment & Refund: A potential buyer may make a purchase and intentionally overpay, often by a significant amount, and then ask for a refund of the balance. For example, someone buys 1 Krugerrand and “accidentally” sends a check for 100 Krugerrands. The seller then sends the coin along with a refund check for the difference. The buyer gets a special clearance on the check, and then his check bounces, leaving the seller with a loss.
Stolen Bank Drafts: Fraudsters will arrange to buy gold and offer payment by bank draft. It can be challenging to verify whether the draft is stolen, legitimate, or altered. Weekends are a prime time for this type of scam, as it provides the fraudsters with a longer period to escape before the bank can verify the draft.
Altered Money Orders: We have had buyers attempt to use fraudulently altered money orders to purchase gold. The fraudster will obtain a quantity of genuine money orders, each for a low value, possibly £1, and expertly alter them to much higher amounts. See the above comment about weekends, which also applies to this type of scam.
You can reach us on our website: www.dkegoldfzc.com and [email protected] for information.