6 Gold IRA Scams to Avoid

Many investors are turning to gold to safeguard against inflation and financial uncertainty. Inflation hit a 40-year high in 2022, and as interest rates grow, so does the number of scams targeting retirement investors. Scammers use deception and high-pressure sales techniques to exploit would-be investors.

In this guide, we’ll help you identify the red flags of a gold IRA scam and provide steps you can take to avoid falling victim to one. If you are considering a gold IRA or suspect you’ve fallen for a scam, this guide can help you understand the warning signs. 

6 examples of gold IRA scams

Scammers exploit government rules to carry out gold IRA scams and take advantage of would-be investors. Below are six of the most common scams in recent years, ranked from the most common to the least frequent.

1. High-pressure sales tactics

This tactic isn’t unique to the gold industry, but it’s certainly problematic for gold IRAs. In May 2023, the Securities and Exchange Commission (SEC) charged three executives of Red Rock Secured for pressuring investors to liquidate other retirement assets to buy gold, claiming it was the only way to protect their savings.

2. Inflated pricing

The same SEC case against Red Rock Secured revealed that the company was marking up gold products by as much as 130%. A study by Fisher Investments found that industry markups could go as high as 35% in most cases. These practices are highly unethical but not illegal.  

3. Delivery of lesser products or fake gold 

In some cases, scammers promise high-quality gold but deliver impure products or counterfeit metals. A Texas man was sentenced to 20 years in prison for taking orders for gold and other precious metals and failing to deliver on his promise. 

4. Sale of non-IRA-eligible collectible coins 

Some gold dealers may attempt to sell you collectible coins, such as the U.S. Liberty coin or Sovereign coins from the UK, for your gold IRA. However, the IRS stipulates that collectible coins are not eligible to be held in an IRA. Be sure you are buying IRS-approved gold before making any commitments. 

5. Fake home storage

Some companies may claim that you can store gold purchased for your IRA in a home safe. That’s just not the case. The IRS requires this gold to be held by a custodian in an approved depository. 

Any attempts to circumvent this rule can result in heavy fines. In one case, a couple was forced to pay over $300,000 in taxes and fines. 

6. Outright theft

In extreme cases, scammers will take the money and run. Regal Assets, once a reputable gold IRA company, defrauded investors when its owner, Tyler Gallagher, disappeared with $10 million dollars in funds. This level of fraud is rare, but it serves as a reminder of the risks involved when investing. 

What to do if you suspect fraud: Our expert’s take

Erin Kinkade

CFP®

If you suspect you have become a victim of a gold IRA scam, report it to the SEC. Follow SEC guidelines, which may include hiring an attorney.

7 red flags to watch for

Gold IRAs are legitimate, and many people have built wealth with gold. So don’t let scams scare you off, but be aware of the following red flags, which could indicate something is amiss.

1. High-pressure sales tactics that insist you make an immediate purchase or move all your retirement savings into gold.
2. Promises of guaranteed returns on your investment.
3. Websites that appear new or provide no contact information.
4. Unsolicited sales calls.
5. Evasive answers about pricing, fees, or delivery.
6. Offers to sell you gold at a price that is only a fraction of its value.
7. Contract details that differ from salesperson statements.

5 tips to avoid gold IRA scams

In addition to watching for red flags, follow these tips to avoid gold IRA scams.

1. Select reputable companies

That goes for the gold company, custodian, and depository you use for your gold IRA. Look for an internet presence, online reviews, and details such as the company’s founding date and physical address. You may be able to use the street view on Google Maps to confirm the address—although remember that many office buildings don’t list the names of tenants on their exterior.

2. Verify licensure

Every state has unique requirements, but many mandate that businesses register with their licensing division. You can often search government databases online to confirm that a business is registered and see how long it’s been in business. 

Visit the licensing agency’s website for the state where a business is based to see whether this is an option.

3. Don’t buy from unsolicited calls and emails

Be wary of any unsolicited calls or emails trying to sell you gold or a gold IRA. You can’t know whether the person contacting you is who they say they are. Instead, do your own research to select a reputable company.

4. Get everything in writing

Before completing a sale or opening a gold IRA, ask to see the contract. Review it carefully for fees, commissions, restrictions, and similar language. If anything makes you uncomfortable—or doesn’t match what the salesperson told you—don’t sign it.

5. Start with a small investment

For peace of mind, consider starting with a smaller investment when doing business with a company for the first time. Most gold IRA companies have minimum deposit requirements, and it might make sense to limit your initial purchase to that amount. 

Once that transaction is successful, you can transfer more of your assets into the gold IRA later.

Ask the expert: Is investing online safe?

Erin Kinkade

CFP®

It is safe to invest online, but it’s imperative to follow through with due diligence and not take shortcuts. If you don’t have time to do the research on your own, it’s wise to hire a financial professional who is well-versed in gold IRA investing.

How to choose a reputable gold IRA company

To avoid scams, it’s important to conduct extensive research before choosing a gold IRA. Reading customer reviews isn’t enough. We’ve seen examples of highly rated companies defrauding investors, including Oxford Gold and Red Rock Secured. Transparency in pricing and services is key. 

The companies listed below are our top recommendations for gold IRA service providers. These companies have proven their commitment to transparency, customer service, and regulatory compliance. We’ve evaluated some of the best gold IRAs across more than 20 data points to provide you with the most reliable options.  

Here’s what to look for when evaluating a gold IRA provider: 

• Regulatory compliance: The company adheres to IRS regulations, so your investment is legitimate.
• Transparent fees: Upfront information on setup costs, storage and management fees.

• Customer support: Consistent, high-quality support that guides you through an IRA setup rather than pushing you through the process.
• Educational resources: Resources that help you understand your options before you make a decision.

How to choose a reputable depository and custodian

Choosing a reputable gold IRA provider is only half the battle. Another factor in securing your investment is choosing the best depository and best custodian to partner with. These companies are responsible for securely storing your precious metals as well as overseeing IRS compliance and account transactions. 

The following are some of the most trusted depository options in the industry:

Depository	U.S. storage locations	In business since…
Delaware Depository	Wilmington, DE & Boulder City, NV	1999
CNT Depository	Bridgewater, MA	1972
International Depository Services (IDS)	New Castle, DE & Dallas, TX	1976
A-Mark Precious Metals	Las Vegas, NV	1965
Brink’s Global Services	Los Angeles, CA & New York, NY	1859

These depositories offer on-site, secure storage and insurance coverage for your investment. 

Are free gold IRA kits legit?

Many gold IRA providers offer free gold IRA kits to attract new investors. Companies including Birch Gold, American Hartford, and Anthem Gold use these kits to introduce would-be investors to the complexities of setting up a gold IRA and funding it with precious metals. These kits often include valuable information on custodians, depositories, and IRS regulations. 

So, are these kits legitimate? Yes, many free gold IRA kits are legitimate. Birch Gold’s free gold IRA kit, for example, explains the benefits of a gold IRA, which precious metals are eligible for your gold IRA, and how to get started. 

Here’s what to look out for if you are having trouble determining whether a gold IRA kit you’ve requested is legitimate:

• Look for companies with a strong reputation from the Better Business Bureau (BBB) and other trusted sources. Birch Gold, for example, has an A+ BBB rating.
• A legitimate gold IRA kit should contain clear, detailed information about the gold IRA, IRS regulations, investment options and the process of setting up your account. Birch Gold’s kit also includes information on custodians, depositories and eligible precious metals.
• If the kit reads like a high-pressure sales pitch, this should be a red flag. Legitimate companies will prioritize education and support over sales. 

Gold IRA scam FAQ

How is a gold IRA different from a traditional IRA?

A gold IRA falls into the category of a self-directed IRA. While any brokerage account can open a traditional IRA, you’ll need a specialized custodian to manage your gold IRA and ensure you are following IRS rules.

Are gold IRAs legit?

Yes, gold IRAs are a legitimate way to save for retirement. However, scammers exist in every industry, so do your homework before opening one.

What should I do if I think a gold IRA is a scam?

You can submit a tip to the Commodity Futures Trading Commission if you suspect a fraudulent precious metals company. Reports can also be made to the Securities and Exchange Commission and the Federal Trade Commission. 

If you have been the victim of fraud, you should also file a report with your local police department.

Are there any upfront fees to open a gold IRA?

In addition to the cost of the precious metals, gold IRA fees may include paying upfront for a custodian to set up your gold IRA. That may include an application fee plus the first year’s management fee, which could be a flat amount or a percentage of your total investment.

How can I check the legitimacy of a gold IRA company?

To determine whether a company is legitimate, check with its state’s licensing agency to ensure it’s registered. If the state doesn’t require registration, look for online reviews on websites such as the Better Business Bureau.

Should I invest all my savings in a gold IRA?

It’s important to keep your investments diversified in case a particular asset has a bad year, and many financial advisors suggest investing no more than 10% of your money in gold. Talk to a trusted professional to determine the right level of gold investment for your situation.