Precious Metals IRA Scams and Red Flags
The most common precious metals IRA scams do not involve fake gold. They involve real metal sold at inflated prices, through fear-based pressure, a switch from bullion to high-markup coins, misleading storage pitches, or "free" offers paid for by hidden markups. Federal regulators including the CFTC and SEC have issued warnings about these tactics, and a short checklist can help you spot them.
What Regulators Have Warned About
The Commodity Futures Trading Commission publishes customer advisories on precious metals fraud in its Learn and Protect section. The Securities and Exchange Commission has also issued public alerts about self-directed IRAs being used to hold assets in fraudulent schemes, noting that custodians generally do not evaluate the quality or legitimacy of what you buy. The common thread: a self-directed account gives you freedom, and the custodian is usually not checking whether a price is fair.
We summarize the CFTC's guidance in more detail on our CFTC precious metals fraud advisory page.
The Main Red Flags
1. Fear and urgency
Sales calls that open with predictions of economic collapse, warnings that your bank account could be seized, or claims that you must move your 401(k) today are designed to rush you. Legitimate companies discuss risks and let you take time. Our page on high-pressure sales red flags lists typical scripts.
2. The bullion-to-collectible switch
A buyer calls asking about gold bullion and is steered toward proof, "limited edition" or "historic" coins described as better or safer. These products often carry much higher markups than standard bullion coins and can be harder to sell near what you paid. Ask for the premium over spot on each product, in writing, and compare it with a widely traded coin like an American Gold Eagle. See numismatic vs. bullion.
3. "IRS-approved" as a sales pitch
The IRS does not approve or endorse specific dealers or coins. It sets fineness and storage rules in Internal Revenue Code section 408(m). A coin meeting those rules does not justify any particular price.
4. Home storage promises
Pitches for a "home storage gold IRA" or keeping IRA coins in your own safe through an LLC carry serious tax risk. In McNulty v. Commissioner (2021), the U.S. Tax Court treated coins kept at home as distributions. See home storage risks.
5. "Free" metal or no-fee offers without details
Offers of free silver or waived fees can be legitimate promotions, but read the conditions. If a "free" bonus depends on a large purchase of products with unusually high premiums, the cost may be built into the price. Ask how the offer is funded and get the terms in writing.
6. Vague or missing pricing
If a company will not tell you the price per coin, the spot price used, and the buyback terms before you commit, treat that as a warning sign.
7. Unverifiable storage
Your metal should be at a named, independent depository, and your custodian's statement should list the specific items. Delays in receiving statements, or statements that do not list products and quantities, are warning signs.
A Pre-Purchase Checklist
- Verify the company's business registration and look up complaint history with the Better Business Bureau and state regulators.
- Get a written price quote showing the premium over spot for every product.
- Ask what the company would pay to buy each product back today.
- Confirm the custodian name and contact the custodian directly to verify the account.
- Confirm the depository name and storage type (segregated or commingled).
- Read the purchase agreement, including cancellation and shipping terms, before signing. See reading a purchase agreement.
- Never send money to an individual or to an account not in the custodian's name.
- Take time. Sleep on any decision that involves moving retirement savings.
Questions That Separate Professional From Pushy
- "Can you email me your full fee schedule and product pricing before I decide?"
- "Which products would be the lowest-premium way to hold gold in this account?"
- "Is your staff licensed to give financial advice?" (Many metals companies, including Goldco, say their precious metals specialists are not.)
- "What happens if I want to cancel after placing an order?"
Our full list of questions to ask a gold company goes further.
How to Evaluate Any Company, Including Goldco
Use the same checks on every company. Goldco is a precious metals company headquartered in Calabasas, California. It publishes a fee statement, says IRA metals go to an independent insured depository, and advertises a buyback program for IRA-approved coins, the written terms of which you should review. Our Is Goldco legit? page applies this checklist to Goldco.
If You Think You Have Been Scammed
Contact your custodian first to confirm what you actually own. Then report the matter to the CFTC, the FTC and your state securities or consumer protection office. Keep every email, recording and document.
Frequently Asked Questions
Is every precious metals company high pressure?
No. Many operate professionally. The red flags above help you tell the difference regardless of size or advertising.
Does my custodian check that the coin price is fair?
Generally not. Self-directed custodians process your instructions; they usually do not judge price or suitability.
Are proof coins allowed in a metals account?
Some proof American Eagles are IRA-eligible, but proof coins usually carry higher premiums. Eligibility is not the same as good value.