Dark Side of Investing: How to Avoid Today's Financial Scams

With the rapid advancement in technology and AI, investment scams (and financial scams in general) have become more sophisticated.

Gold has become a favorite target for these criminals because it’s untraceable and doesn’t leave a paper trail. Fraudsters play on investors’ fears about the economy and their desire for a secure financial future.

At CMI Gold & Silver, we’ve been in business for over 50 years and have seen many scams come and go. The newest wave of investment fraud is more damaging than anything we’ve witnessed before. Here’s what you need to know about these scams, the warning signs to watch for, and how to keep your investments safe.

How Investment Scams Have Changed with New Technology

The days of obvious scam letters with bad grammar or suspicious phone calls you could easily hang up on are (mostly) gone. Today’s scammers use advanced technology to build fake websites that look real and copy the voices of people you trust, which they then use to create complex schemes that can trick even careful investors.

New AI technology lets fraudsters make “deep fakes” — videos or voice recordings that sound like financial experts or family members. The FTC reports that consumers lost $5.7 billion to investment scams in 2024, a 25% increase from the previous year, making them the largest category of reported fraud.

Just recently, the Justice Department arrested five people who targeted older adults in a tech support scam involving gold bars. The scammers told victims that their retirement accounts were at risk and convinced them to convert their savings to gold “for protection.” This single operation stole at least $8 million from elderly victims across ten states.

Common Types of Investment Scams

While scammers are always coming up with new tricks, most investment fraud fits into a few basic categories:

Romance Scams

These begin when a scammer starts a relationship with you through social media or a dating site. After spending weeks or months gaining your trust, they’ll eventually bring up a “great investment opportunity” they’ve found. The FBI notes that romance scams work well because victims trust the person and don’t want to believe they’re being conned.

Imposter Scams

These crooks pretend to be from real financial companies, government offices, or well-known investment firms. They might call you about a “problem” with your accounts or offer you a special investment deal. Last year, a widower in Indiana lost $80,000 when scammers claiming to be FBI agents convinced him to buy gold bars to “protect” his money from being taken.

Crypto Investment Scams

Cryptocurrency scams have taken off in recent years. Scammers promise huge profits on crypto investments that don’t actually exist. They often build fake trading websites that seem to show your investment growing — until you try to take your money out and find it’s all gone.

Phishing Scams

These attacks use emails, texts, or pop-up messages that look like they’re from legitimate businesses. They usually tell you there’s an urgent problem to get you to click on bad links or go and download harmful software. One click can give scammers access to your bank accounts or personal information.

Fake Gold and Silver Investment Scams

As experts in the precious metals industry, we’re especially worried about the increase in gold and silver investment scams. These usually come in two forms:

  1. Dishonest dealers who sell fake metals or charge way too much. Gold telemarketers are known for adding 30-100% markups on coins that aren’t worth nearly that much.
  2. The gold courier scam, where victims are talked into turning their savings into gold “to keep it safe” and then hand it over to someone pretending to be a government agent. A recent ABC7 news story uncovered a widespread operation where couriers picked up gold bars from victims and disappeared with them.

Protect Yourself by Watching for These Red Flags

Your best defense against investment scams is knowing what warning signs to look for. Here are the most common red flags that should make you suspicious:

Threats and Fear

Scammers often try to scare you by saying your accounts have been hacked or your assets are at risk. They create fake emergencies to push you into making quick decisions. Real financial companies don’t use fear to make you act.

Pressure Tactics

If someone is pushing you to “act now” or says an investment opportunity is “limited time only,” that’s a big warning sign. Good investments don’t vanish overnight. At CMI Gold & Silver, we encourage our customers to think things through and get all the facts before investing.

Misleading Promises

Be suspicious of any investment promising “guaranteed returns” or “no risk.” Every investment has some risk, and no honest advisor can guarantee specific returns. If it sounds too good to be true, it probably is.

Requests for Personal Information

Real financial institutions already have your information and won’t ask for sensitive details like your Social Security number or account passwords by email or phone.

Be very careful about sharing personal data, especially when you didn’t contact them first. If something seems fishy then contact the Federal Trade Commission (FTC) at ReportFraud.ftc.gov and the Securities and Exchange Commission (SEC) at sec.gov/tcr

Do Your Research

The FBI has created a dedicated website that helps provide education and overviews of many of the most common scams and schemes today. It’s regularly updated, and investing a few minutes of your time can possibly save weeks, months, or more of headaches caused by scammers.

What to Do If You’ve Been Scammed

If you think you’ve fallen victim to an investment scam, take these steps right away:

  1. Cut off all contact with the scammer and don’t send any more money
  2. Save everything — keep all messages, receipts, and records related to the scam
  3. Call your bank and credit card companies to lock down your accounts
  4. Tell the authorities about what happened (see below)
  5. Watch out for recovery scams — some crooks target victims a second time, claiming they can help get your money back for a fee

Remember that getting scammed doesn’t mean you were stupid. Today’s sophisticated fraudsters can fool anyone, so don’t be embarrassed to report what happened and ask for help.

How to Tell Authorities About Scams

If you spot a likely investment scam, telling the authorities helps them track down and stop the criminals. Report to:

  • The FBI’s Internet Crime Complaint Center at ic3.gov
  • The Federal Trade Commission at ReportFraud.ftc.gov
  • Your state’s securities regulator
  • The Securities and Exchange Commission (SEC)

For precious metals scams specifically, you can also contact the Commodity Futures Trading Commission (CFTC).

Protecting Your Investments When Times Are Tough

With the economy uncertain and markets going up and down, scammers are working overtime to take advantage of investors’ fears. While precious metals can be a good way to add variety to your investments and protect against inflation, it’s important to work with dealers you can trust.

At CMI Gold & Silver, we’ve built our name on honest business and fair pricing since 1973. We never rush you into decisions, never charge excessive markups, and always make sure our customers have all the facts they need to make good choices.

Investment scams will keep changing, but the basics of protecting yourself stay the same: do your homework, check things out before trusting, don’t rush, and stick with established companies that have stood the test of time. When looking into precious metals investments, remember that honest dealers focus on education and clear information rather than pushing you to act quickly out of fear.

Call us today to learn how we can help you safely invest in precious metals with confidence and peace of mind.

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