The consumer investor protection group Wall Street Watchdog issued an alert on Friday that advised investors to watch out for Chinese counterfeit precious metal scams and Chinese counterfeit gold and silver coin scams. In the alert, the group warned investors to exercise extreme caution when buying gold, silver, or other precious metals, particularly from China.
"We have one Chinese counterfeiter bragging about the fact that his operation manufactures 100,000 fake US Silver Dollars each year. This is just one guy," said the Wall Street Watchdog. And, you can bet that "one guy" isn’t alone.
With the continuing volatility of the global stock markets, it’s really no surprise that precious metals, gold, and silver investments have become a multi-billion dollar industry. Investors want to put their funds in safe products that carry the potential for high returns. Gold and precious metals often seem to fit the bill. But, as regulators and investor protection groups know all too well, increased popularity brings increased opportunity for fraud.
"Do not do business with any precious metal dealer, or gold, or silver coin retailer unless you can establish they are legitimate, and you can confirm they have a written money back guarantee policy, for their customers," advised the group. "Chinese counterfeit precious metal coins, and gold, or silver bars, are going to ruin many investors, and this is going to get ugly. Do not become a victim."
The Wall Street Watchdog isn’t alone in its warning. In August, the Financial Industry Regulatory Authority (FINRA) issued anews releasewarning investors against gold-related investment scams:
"Con artists are using the run-up in the price of gold as a hook to part investors from their money," said Gerri Walsh, FINRA's Vice President for Investor Education. "Investors should think twice before investing in any gold investment promising exponential returns."