Cash For Gold Scams

There are scams and con artists in pretty much all facets of business and with the current poor economy they seem to be even more prevalent.  This is true in the precious metals industry as well in the form of cash for gold scams, first there are the unscrupulous companies that under pay, under weigh, under quote or misrepresent their pricing.  Let’s look at these first.

Under paying their clients. This is a pretty straight forward thing to explain, your unwanted gold jewelry is worth money, the gold buyer determines how much they want to pay, we pay a fair rate which is 80% of the actual gold value, I believe this is fair as we have associated costs such as rental costs, employee costs, operating expenses such as gas, power, property taxes, supplies etc.  Many companies pay far less, many companies try to rip off the public by paying as little as they can even as low as 25% or lower, this is terrible but you can avoid these companies simply by doing some comparative pricing, if a company won’t tell what they pay per gram, move on, they are likely going to rip you off.

Under weighing your items.  Hard to believe but it’s true, many companies will weigh the items but mis quote you on the real weight, always make sure they tare out the scales and show you the weight, don’t take their word for it.  If  you’re using a mail in service you must know the weight before you send it, you should also know the karat of your items so you can get a rough quote ahead of time.

Misrepresenting their pricing. Another common trick these days are companies who list their pricing in pennyweight or dwt instead of grams, this makes  their prices look much higher if you don’t know what a pennyweight is, a pennyweight of dwt is actually 1.55 grams, again if they are trying to mislead you this way I’d steer clear as they will likely try to low ball you.

For the most part companies that run national television campaigns are paying some of the lowest prices around, they have large advertising expenses and thus have to make up the difference somewhere and that is by paying you a low price for your unwanted gold jewelry.

Email Scams

This is another area that I get inquiries from on a daily basis, in a nutshell it goes a little like this, scam artists from Africa, Nigeria, Ghana and many other countries send me emails like this:

Quote:

“Hello Sir,

We are small scale Gold miners here on the sub-region of West Africa . We have 600 kg of alluvial Gold Dust for sale at a considerable price per kilo which is below world market price. If you are interested, do not hesitate to get back to us as soon as possible for us to give you our full co-operate offer (FCO).

We look forward in doing a long lasting business transaction with you.

Attah Anthony”

End Quote

Now out of curiosity I did reply to a couple of these inquiries, here is the next of their emails to me:

Quote:

Dear Mr.john

How are you? I write to inform you that I have acknowledged the receipt of your mail and we are ready  and willing to transact gold business with you.

we are small scale Gold miners here on the sub-region of West Africa  and we have 600 kg of alluvial Gold  which is being deposited with Zpower Gold Ghana ltd a private gold license dealers and I want to let you know that we use to deposit all our produce to Zpower gold Ghana ltd because they are authorized to export and import gold and therefore I will appreciate if you can send your financial director to come down to Ghana so that we can see face to face and discuss how we can commence the shipment of the 600 kg we deposited with Zpower gold Ghana ltd.

Below are the offers of Zpower gold Ghana ltd to their customers.

1, Zpower gold Ghana ltd will prepare letter of invitation that will enable you to obtain an entry visa to Ghana.

2, Zpower gold Ghana ltd is responsible for your accommodation during the period of the transaction.

3, ZPower gold Ghana ltd will also provide their company car and a driver that will take you around during the period of the transaction.

4,Z POWER GOLD LTD

32 KOFI ANAN ST.,NORTH LEGON,ACCRA,GHANA

P.O. Box 1801, Teshie Nungua, Accra, Ghana

Tel. (+233)(0) 21-500-565  or (+233)(0) 242-005-244/543/203-469

Facsimile (+233)(0) 21-500-566 or (+1) 602-532-7517
FULL CORPORATE OFFER (FCO) FOR THE SUPPLY OF AU GOLD DUST
Our Ref: ZPGGL/2010……..                                                          Your Ref…………
From: ZPower Gold Ghana Ltd.
COMMODITY  : AU (GOLD)
FORM   : Alluvial DUST or Bars.
TOTAL QUANTITY :           750 kgs
PURITY   : 22 Carats  (916.5) minimum  :
ORIGIN   : GHANA / WEST AFRICA
PRICE   : US$20,000 per kg.
PAYMENT   :      CASH  OR SWIFT WIRE TRANSFER
PROCEDURE:
1. Seller sends Buyer Full Corporate Offer (FCO)
2. Buyer signs and returns FCO in their own chosen format
3. Seller and Buyer sign Contract after the final report to the buyer’s Refinery buyer to

wire by TT. Telegraphic transfer, to seller’s account.
4. Seller\s accounts within 96 hours, less the shipment cost, And other Government taxes.
DOCUMENTS:
A. Commercial Invoice
B. Certificate of Origin and Ownership
C. Airway Bill marked ‘freight prepaid’
D.  Assay Certificate or Report from GEOLOGICAL SURVEY DEPARTMENT.

SELLER

Signed:

Bankers: United bank for Africa, Intercontinental bank ltd, Standard chartered bank plc

Further information will be given to you when I hear from you.

Kind Regards.

End Quote

The next email they always get around to asking me to send them funds so they can ship the gold to me,  hmmm, not something I would do but evidently someone does as I get these on a daily basis.  Others will also try to convince you to travel to them to inspect the gold.  Now I’m not the only one to receive these emails as I get calls daily from the general public who have received the same email and they call me looking for quotes on the ‘supposed’ gold for sale, I sincerely hope no one actually gives these thieves any money.

Many of these same con artists also contact me on the phone, I can predict when they’re calling as they are always using Skype to make their calls.

Another little scam that seems to be gaining some head way are people that are phoning refining companies or gold buyers such as myself stating that they have established mines and require funds to extract the gold.  Their proposal is that they would like me to advance them funds so they can get their extracting process started, in turn they will sell me the gold at a discount within 6 to 9 months.  I must say the gentleman I spoke to sounded quite professional but honestly, who would send someone funds ahead of time for a process like this unless you are an expert geologist?

Here’s another email I get quite frequently, again another gold scam from Ghana, from a prince no less :

Quote:

 DEAR SIR,
INTRODUCTION AND OFFER OF GOLD AND DIAMOND
WE PRESENT TO YOU OUR OFFER AS FOLLOWS.

COMMODITY     -------   ALLUVIAL GOLD DUST
QUANTITY            -------   150KGS
QUALITY               -------   23 CARAT PLUS (92.5) PURITY
PRICE                    -------    $2200 (Two thousand, two hundred dollars)
CONDITIONS AND TERMS.

THE BUYER IS OBLIGED TO COME TO GHANA TO MEET THE SELLER TO NEGOTIATE AND
ASSIST IN THE SHIPMENT OF THE MERCHANDISE TO BUYERS DESTINATION. THE BUYER IS
OBLIGED TO CONDUCT AN INTIAL ASSAY TEST ON THE MERCHANISE, YOUR CONSENT AND
APPROVAL ON THIS OFFER IS NEEDED TO ENABLE US TO PREPARE A CONTRACT AGREEMENT,
AS OTHER RELEVANT DETAILS SHALL BE SENT TO YOU ON REQUEST. PLEASE CONTACT ME
VIA PHONE NUMBER OR EMAIL:

AWAITING YOUR PROMPT AND POSITIVE RESPONSE
YOURS FAITHFULLY
PRINCE MALUNZE.
MALUNZE & SONS CO.

End Quote

Your Input:

I’ll keep you posted as I come across more cash for gold schemes, if you have any you’d like to report for me to post please see our contact page for details on how to send your experiences.

Please note that not all companies are dishonest, I have recently been contacted by the owner of ZPower Corporation who states: “I own the US Trademark for the name ZPower. I also own ZPower Gold Ltd in Ghana, and in the UK and in Nevada.  The individuals you refer to in your email are simply Nigerian scam artists. I had them arrested earlier this year in Ghana (I can send legal evidence of this). ”

The persons I am referring to earlier in this post have nothing to do with the law abiding business previously mentioned, it’s good to see that someone is taking action against these con artists.

Here is another example that a reader sent to me, fortunately he didn’t make the final payment or he would have been out a lot of money:

“I suspect that I have been dealing with a scammer in my attempt to
acquire some gold bars. His email is johnsongold@gmail.com.

I already sent him a 500 dollar fee for him to pay some taxes. I was
about to send him another $50,000 for the gold shipment when I was
warned about him being a fraud.”

Please note: The long and short of it is, do not send anyone, any money, for any reason, if you get solicited by these scam artists via email, phone or any other means ignore them, the only reason they continue operate is that they are getting money from someone.

In the meantime I’ll continue to keep you up to date with any new cash for gold schemes, if you’d like to add your experience please use our contact form to send me your input.