Things You Should Know about the Gold Bullion Scam


Gold Bullion Scam. In recent years, there are quite a number of articles found in the local newspaper about using Gold as an investment vehicle. This Gold Bullion is initially known as the Gold Buyback Scheme (before it was realized to be a sham investment) entailed investments on actual gold (gold coins for instance). The strategy used was ingenious with a return promise that seemed too good to be true; this scheme attracted over a few hundred investors. Investors who put in big amounts of money, some even their life savings amounting to at least a total of thirty-five million dollars in investments, so you can imagine the devastation when they realized it was all a scam to reap them off. However, if some of these individuals had an education on the gold buy-back schemes then maybe they would not have been vulnerable enough to be manipulated by local companies such as the Suisse International.


The Gold Bullion Scam (How it happened)


Investors were asked to invest in physical gold by purchasing the gold from the Gold buy-back scheme company at a discounted price. The promise of return was two percent of the buying price-per-month. The companies pledged to buy back the gold at the original price despite the fluctuating market price (even when the price went low). The investors were even allowed to take the gold home, building a sense of trust between the investors and the company. Plus it was a strategy for them to have their investors refer their friends and relatives as more investors for which they also received more discounts.

According to the investors’ perceptions, they were to earn over twenty percent of the buying price per annum without any investment risk. But the risk was camouflaged by how lucrative the deal sounded. The risk was rather simple and quite severe, the company, in the end, had no initial intentions of buying back the gold. All they were aiming for was for the initial investors to put in more money and attract more investors to do the same. Then elope with everything leaving a population of two hundred and fifty angry and devastated investors.

The following are some of the factors these individuals would have looked into before making that bad investment on the Gold buy-back scheme.


Return Generation

This the first thing any of these investors should have looked into before getting their money from their pockets and bank accounts. It should be common sense that there is no free bid in the investment business. Both parties are meant to earn and if there is no clear strategy on how this can be achieved then one party is likely to incur losses, in this case, the investor.


The Gold Prices

Most people do not know the price of gold and leave that task to the Gold buyback scheme companies to educate them. That is an aspect that these businesses prey on to take advantage of the investors. So that when they buy the gold at a discount, it is the actual price and by that, you are paying premiums for the prices offered to the goldsmiths or bank for that same amount of gold, this means that the investor pays more just by participating in this scheme.


Ask Questions and Make Inquiries

Before you put your money on an investment especially as big as a gold buyback scheme, ask questions. You have the right to know;

  • Who can you approach in the case of an inquiry or irregularity?
  • How is the company going to pay you?
  • How does the company generate its returns?
  • What are the terms and conditions of investment?
  • What is the old price in other parts of the market?

The answers to these questions would have helped these investors assess the risks and probably make the right call.


In conclusion, the Gold buyback scheme has its pros and cons. And given the experience of the Gold Bullion Scam victims, the effect of the cons are quite severe. Remember, before you make an investment get the knowledge first.

Check out some of the newspaper’s report:
Gold scam victims’ painful loss
Gold investment firm director ‘goes missing’

You might also be interested in reading in other investment scams.

Gold Bullion Investment Scams