Federal regulators including the Commodity Futures Trading Commission, the Federal Trade Commission, and state attorneys general have brought enforcement actions against precious metals dealers operating five recurring patterns of investor harm. The dollar amounts in the documented cases reach hundreds of millions. The victims are overwhelmingly retirement-age Americans. This guide names each pattern, explains the mechanics, and shows how to verify a dealer before any retirement money moves.
Quick Answer
The five most documented Gold IRA scam patterns are: numismatic upselling at markups of 50 percent to over 300 percent above spot, fabricated reviews and falsified trust badges, bait and switch from an advertised low-premium product to a high-markup substitute, post-purchase storage-fee escalation, and buyback spreads engineered to lock in the customer’s loss. Each pattern appears in federal and state enforcement filings, including a joint FTC and California Attorney General action against a California dealer (2019), a CFTC action joined by 30 state regulators against a telemarketing dealer network (2020), and the 2022 bankruptcy of a once A-plus-rated national dealer. Verification is free, takes 20 minutes, and prevents nearly every documented case.
Scam 1: Numismatic Upselling
Pattern 1 of 5
The pitch. A dealer steers the customer toward “proof” coins, “certified” coins, or “limited mintage” coins by claiming they appreciate faster than standard bullion or carry collector value above metal content. The customer believes they are upgrading their position.
How the markup works
Internal Revenue Code Section 408(m) and IRS Publication 590-A set the eligibility test for IRA-held precious metals: gold must be 99.5 percent fine, with a statutory exception for the American Gold Eagle. The test is fineness, not rarity. A proof American Gold Eagle qualifies for the same reason a standard bullion Eagle qualifies: it meets the purity threshold. The proof finish adds no IRS value and no structural reason to pay a 50 to 200 percent premium.
Documented markups on common modern proof coins run from 50 percent to over 300 percent above spot, as alleged in Federal Trade Commission and Commodity Futures Trading Commission filings. On a 100,000 dollar rollover at a 60 percent markup, roughly 37,500 dollars is captured by the dealer at the point of purchase. Spot would need to climb 60 percent before the account reaches break-even.
What to verify
Ask the dealer to write down the current spot price, the premium percentage, the product specification (mint, fineness, weight), and the buyback price they would pay today. FINRA’s Precious Metals Fraud alert identifies refusal to provide that breakdown in writing as a leading fraud indicator. For the full IRS eligibility list and additional context, see our guide on overpriced numismatic coin pitches.
Scam 2: Fake Reviews and Fake BBB Badges
Pattern 2 of 5
The pitch. A dealer points to glowing reviews on their own website, Trustpilot, or a third-party listing. They display a Better Business Bureau badge or rating image on every page. The customer treats this as social proof.
How the fake works
The Federal Trade Commission’s 2024 Rule on the Use of Consumer Reviews and Testimonials prohibits the buying, selling, or fabricating of consumer reviews. Enforcement has accelerated. Common red flags include sudden bursts of identical-phrasing five-star reviews, reviews dated before the company existed, image-only “BBB Accredited” badges that do not link to a live BBB profile, and reviewer profiles with single-review histories.
Verification is straightforward and free. Open bbb.org directly. Type the dealer’s legal name. If the badge on the dealer’s website is real, the live BBB profile will show: accreditation status, letter rating, the year accreditation began, total complaint count, and how complaints were resolved. A static badge on a dealer site that does not match the live BBB profile is a fabrication.
What to verify
Cross-reference reviewer names on Trustpilot, Google, and the company’s own site. Look for reviewer history beyond a single post. Check the complaint trajectory on the BBB profile across three years, not just the current rating. Our deeper analysis of this pattern is in fake BBB and Trustpilot reviews on gold IRA dealers.
Scam 3: Bait and Switch from Advertised Low Premium to High Markup
Pattern 3 of 5
The pitch. The advertisement features a low premium on a standard bullion product such as the American Gold Eagle or a 1-ounce PAMP bar. The customer calls, expresses interest, and during the conversation is steered toward a different product the dealer presents as a better fit for retirement purposes.
How the switch works
The customer arrives with a price expectation set by the ad. Inside the call, the salesperson reframes the original product as inappropriate for retirement, citing rarity, liquidity, or “premium” coin advantages that do not hold up to outside review. The substituted product carries a markup that is multiples of what the advertisement showed.
Federal Trade Commission filings against precious metals dealers describe this conversion path in detail. Sales staff compensation tied to commission per transaction creates the structural incentive: bullion at a 4 percent premium pays the salesperson less than a coin at a 60 percent premium on the same dollar amount. Customers rarely know what they were originally going to receive versus what they actually bought.
What to verify
Before the call, write down the product, the spot price at that moment, and the premium implied by the ad. After the call, compare what the dealer ultimately quoted against your written starting point. If the product changed and the markup grew, ask why in writing. For more, see our breakdown of bait-and-switch tactics in gold IRA sales.
Scam 4: Storage-Fee Escalation Post-Purchase
Pattern 4 of 5
The pitch. The dealer quotes a flat first-year storage fee and a low custodian setup cost. The numbers fit the customer’s budget. The customer signs.
How the escalation works
Two structural issues drive most storage-fee surprises. First, scaled fee structures charge a percentage of asset value annually, which compounds as gold appreciates or as the account grows. Second, “first-year promotional” pricing reverts to standard rates in year two without explicit notice. The customer discovers the change only when reviewing the annual statement.
A retiree holding a 200,000 dollar gold IRA on a 0.50 percent scaled fee pays 1,000 dollars per year. The same account on a flat 200 dollar fee pays 200 dollars. Over 15 years, that difference compounds into mid-five-figure variance even without metal appreciation. Storage agreements are written, signed documents. The numbers are knowable in advance.
What to verify
Request the full fee schedule before signing: setup, annual custodian, annual storage (flat or scaled), wire fees, transaction fees per buy and per sell, and termination fees. Compare year-1 and year-2 costs side by side. Ask which depositories the custodian uses and whether storage is segregated or commingled. Our reference data on this pattern is in hidden fees and gold IRA warning signs and segregated vs commingled storage.
Scam 5: Buyback Spread Weaponization
Pattern 5 of 5
The pitch. The dealer advertises a “buyback guarantee” or a “we will always buy your metals back” promise. The customer reads this as price protection. The customer interprets the guarantee as a market for what they paid.
How the spread works
A buyback guarantee is a guarantee of liquidity, not of price. Most dealers buy back at the current spot price plus a small premium for bullion, or at near-spot for previously sold coins. A customer who paid 100 dollars per ounce above spot for a proof coin and sells back at spot loses that full premium on day one. The 100 dollar gap is the dealer’s locked-in margin.
The weaponization happens at purchase, not at sale. The premium charged at purchase is the spread that the buyback will never close. The customer believes they have downside protection. The economics show otherwise: gold’s spot price would have to rise by the full purchase premium before the customer reaches a neutral position.
What to verify
Before any purchase, ask the dealer to quote the buyback price for the exact product they are selling, at today’s spot. The gap between what you would pay and what they would pay is your real cost of liquidity. Get it in writing. Compare against the buyback policies of operators with public terms: Augusta buyback policy, Birch Gold buyback policy, and Noble Gold buyback policy.
Documented Enforcement Cases
Three federal and state actions illustrate the patterns above with public-record specificity. None of the operators below are partners of Goldiew, and references to these cases are sourced from regulatory press releases and court filings, not from competitor marketing.
FTC + California Attorney General
California precious metals dealer (complaint filed 2019, Central District of California)
The Federal Trade Commission and the California Attorney General jointly filed a complaint against a California precious metals dealer and its principals. Per the complaint, the company sold gold and silver coins to retirement-age customers, many of whom were rolling over pension or 401(k) assets, at prices alleged to run 100 percent to 122 percent above the prevailing spot price.
- Mechanism: numismatic coin substitution at the markup point
- Target demographic: seniors rolling over retirement accounts
- Resolution: settled with monetary judgments and injunctive relief
- Pattern match: Scam 1 (numismatic upselling) and Scam 3 (bait and switch)
Full case detail and source documents are in our Operation Firstline FTC enforcement summary.
CFTC + 30 State Regulators
National telemarketing dealer network (filed September 22, 2020)
The Commodity Futures Trading Commission filed jointly with 30 state regulators against a network of affiliated dealer entities and their principals. The court entered an emergency restraining order and appointed a federal receiver the same day. The CFTC’s public press room documents the action.
- Alleged scheme size: 185 million dollars across roughly 1,600 customers
- Retirement funds involved: approximately 140 million dollars sourced from IRAs and 401(k) rollovers
- Alleged markup range: 100 percent to over 300 percent above spot
- Pattern match: Scam 1 (numismatic upselling), Scam 3 (bait and switch), and high-pressure telephone sales
Bankruptcy (Customer Complaint Pattern)
Established gold IRA dealer bankruptcy (filed 2022)
The dealer operated for over a decade with a BBB A+ rating before complaint volume spiked in 2021. The BBB revoked accreditation. The company filed for bankruptcy in 2022. Customer complaints in the public record allege that funds were collected for precious metals purchases but the metals were never deposited at the depository in some accounts.
- Profile: national dealer, more than a decade in operation
- Trust marker change: BBB A+ revoked 2021
- Court status: 2022 bankruptcy filing, verifiable through PACER
- Structural lesson: depository segregation protects the customer only if metals were actually deposited
Treat all allegations as allegations until adjudicated.
Statements above attributed to a complaint are the regulator’s claims at the time of filing. Where a case settled with a monetary judgment or injunction, that resolution is in the public record. Where a case is bankruptcy-pending, claim outcomes vary by creditor category. Verify current case status directly via the relevant agency or the federal PACER system.
Pre-Purchase Verification Checklist
Every pattern above is defeated by 20 minutes of verification before any money moves. The steps below come from FINRA’s Precious Metals Fraud alert, the Securities and Exchange Commission’s precious metals investor alert, and patterns documented across FTC and CFTC enforcement.
Verify before any wire transfer
- Look up current spot gold price on a public commodity feed before any sales conversation. The number is free and updated continuously.
- Open bbb.org directly. Search the dealer’s legal name. Confirm accreditation status, letter rating, accreditation start year, and complaint volume across three years.
- Search the dealer’s legal name and the names of its principals in the CFTC enforcement actions database at cftc.gov and the FTC case database at ftc.gov.
- Verify state registration through your state securities regulator. The North American Securities Administrators Association at nasaa.org lists all 50.
- Request a written quote that shows: spot price at the time of quote, premium percentage, product specification (mint, fineness, weight), total price per unit, and the buyback price the dealer would pay today.
- Confirm the IRS-approved custodian’s legal name and the depository’s legal name. Storage at home is prohibited for IRA-held metals and the IRS treats home storage as a distribution per Publication 590-B.
- Request the full fee schedule: setup, annual custodian, annual storage (flat or scaled), wire fees, buy and sell transaction fees, termination fees. Compare year 1 and year 2 line by line.
- Consult a licensed tax professional or financial advisor before initiating a rollover. Rollover errors create taxable events that compound the financial harm of any pricing problem.
Spot price is the anchor.
Every scam pattern above ultimately rests on the customer not knowing the current spot price for what they are buying. Common bullion (American Gold Eagle, Canadian Maple Leaf, PAMP and Valcambi bars) trades at 1 to 5 percent above spot at reputable dealers. Premiums above 10 to 15 percent require a clear, written, verifiable explanation tied to product specifics, not to claims of rarity or future appreciation.
For the structural opposite of the patterns above, see how Goldiew vets gold IRA companies and the current companies watchlist. Both are maintained independently of any commercial relationship.
Related Tools and Reading
Before any purchase, two short self-checks reduce exposure to the patterns above. The gold value calculator establishes what your existing gold (or any quoted gold product) is worth at today’s spot, which is the anchor every scam pattern relies on the customer not knowing. The how to tell if gold is real guide covers home authentication tests for previously purchased coins or bullion, useful when buying through any non-IRA channel.
For deeper reading on the patterns covered above, see our precious metals fraud warning signs (FINRA-aligned), our research checklist before buying a Gold IRA, and our CFTC enforcement database 2015 to 2026.
Frequently Asked Questions
What is the single biggest red flag in Gold IRA sales?
A dealer who will not put the spot price, the premium percentage, the product specification, and the buyback price in writing before you commit funds. Every scam pattern in this guide depends on the customer not having those four numbers documented in advance. Legitimate dealers provide that breakdown as part of normal practice. Refusal to provide it is the leading indicator identified in FINRA’s investor alert.
How much above spot price is a reasonable premium?
For common government-minted bullion (American Gold Eagle, Canadian Maple Leaf) and recognized bars (PAMP Suisse, Valcambi, Credit Suisse), 1 percent to 5 percent over spot is the typical reputable-dealer range. Silver bullion premiums are somewhat higher. Premiums above 10 percent to 15 percent on standard bullion require a clear, written justification tied to verifiable market data. Premiums of 50 percent to over 300 percent appeared in federal and state enforcement complaints and are the markup signature of the scam patterns documented in this guide.
Can I store IRA gold at home?
No. Under IRS Publication 590-B, precious metals held inside a self-directed IRA must be stored with an IRS-qualified custodian at an approved depository. Storage at home, in a personal safe, or in a safe deposit box in your own name is treated by the IRS as a distribution. That triggers ordinary income tax on the distributed amount and the 10 percent early withdrawal penalty if you are under age 59 and a half. Any dealer who suggests home storage as an option for IRA-held metals is either uninformed or deliberately misleading you. Consult your tax professional for your specific situation.
How do I verify a BBB badge displayed on a dealer’s website?
Open bbb.org in a separate browser tab. Type the dealer’s legal name. The live profile will show accreditation status, letter rating, accreditation start year, total complaints, and how complaints were resolved. A real badge on a dealer site links to that profile when clicked. A static image badge that does not match the live profile is the verifiable fabrication pattern flagged by the Federal Trade Commission’s 2024 Rule on the Use of Consumer Reviews and Testimonials.
What metals qualify for a self-directed IRA?
IRS Publication 590-A and Internal Revenue Code Section 408(m) set the eligibility test by fineness, not rarity. Gold must be 99.5 percent pure, with a specific statutory exception for the American Gold Eagle. Silver must be 99.9 percent pure. Platinum and palladium must each be 99.95 percent pure. Metals must be held by an IRS-qualified custodian at an approved depository. Numismatic coins valued above metal content for rarity are generally prohibited. For your specific situation, consult your tax professional.
How do I report a suspicious precious metals dealer?
Report to the Commodity Futures Trading Commission at cftc.gov/tips, to the Federal Trade Commission at reportfraud.ftc.gov, and to your state securities regulator (find yours through nasaa.org). All three accept anonymous reports. Reporting protects other investors. One major 2020 case was built on evidence gathered independently by 30 state agencies before the joint federal filing. Individual reports to state regulators contribute to that pattern recognition.
What is the difference between a buyback guarantee and price protection?
A buyback guarantee is a guarantee of liquidity. It promises the dealer will buy your metals back, typically at or near current spot. It is not a guarantee of price relative to what you paid. A customer who paid 100 dollars per ounce above spot for a proof coin and sells back at spot loses the full 100 dollars per ounce on day one. The buyback policy describes the channel for selling; the original premium describes the cost of using that channel. Compare buyback quotes against current spot before any purchase decision.
Does a long operating history alone make a dealer safe?
No. One national dealer operated for over a decade with a BBB A+ rating before complaint volume spiked in 2021 and it filed for bankruptcy in 2022. Operating history is a useful input but not a sufficient one. Pair it with: complaint trajectory across three years on the live BBB profile, absence of CFTC and FTC enforcement history, written pricing documentation, and verifiable depository segregation. Consult your tax professional and a licensed financial advisor before moving retirement funds.
Are gold IRAs regulated by the SEC?
Physical precious metals sold for immediate delivery fall under the Commodity Futures Trading Commission’s jurisdiction over commodity spot transactions. The IRA vehicle itself is governed by the IRS under the Internal Revenue Code. State securities laws apply to dealers and investment advisors who solicit these products. The Securities and Exchange Commission has published investor alerts on precious metals fraud. Multiple regulators overlap in this space, which is why 30-state and federal coordination is structurally possible and has been used in enforcement actions.
What single step prevents the most documented harm?
Independently check the current spot gold price before any sales conversation and require the dealer to put spot, premium, and total cost per unit in writing before any wire transfer. That single step disrupts numismatic upselling, bait and switch, and buyback spread weaponization at the same time. Combine it with a five-minute BBB profile check and a five-minute search of CFTC and FTC enforcement databases. Total time investment: 20 minutes. For a transaction involving tens of thousands of dollars in retirement savings, that ratio is favorable.
Sources and Methodology
This guide draws on federal regulatory press releases, IRS publications, FINRA and SEC investor alerts, and internal Goldiew enforcement summaries cross-referenced against the cited public records. Case facts (defendants, dates, amounts, markup ranges) come directly from CFTC, FTC, California Attorney General, and federal court filings. Partner company facts are sourced from each company’s public website and cross-referenced with BBB profiles, verified within the last 90 days.
- CFTC Press Room: enforcement actions involving precious metals fraud
- FTC Cases and Proceedings: precious metals enforcement actions
- IRS Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs)
- IRS Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs)
- Internal Revenue Code Section 408(m): Investment in Collectibles Treated as Distributions
- FINRA Investor Alert: Precious Metals Fraud
- SEC Investor Alert: Precious Metals Fraud
- SEC Investor.gov: Commodities Overview
- FTC 2024 Rule on the Use of Consumer Reviews and Testimonials
- NASAA: North American Securities Administrators Association (state regulators)
- Better Business Bureau: Business Accreditation and Complaint Database
- FTC: Report Fraud Portal
- CFTC: Report Fraud, Manipulation or Abuse
- PACER: Federal Court Records (federal court and bankruptcy filings)
Goldiew Research and Editorial reviewed federal enforcement documents for this guide. Where a case is referenced, the allegation is attributed to the complaint at the time of filing. Where a case has been resolved or is pending, the public-record status applies. See our full methodology and disclosures.