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Bullion Consumer Tips

Bullion coins are defined by Minnesota law as any coin containing more than one percent by weight of silver, gold, platinum, or other precious metal. Bullion coin dealers are licensed by the Minnesota Department of Commerce and must undergo background checks.

There are many reputable bullion dealers in the industry, but consumers need to be aware that there are disreputable or dishonest dealers that may not have your best interests in mind.

Following are some "red flags" that may assist you in determining if you are NOT working with a legitimate or honest dealer. 

  • Red Flag: Don’t fall for phony pitches. 

    • Unscrupulous dealers may try to entice you with an artificially low price on an internet or TV advertisement in hopes of getting your contact information. Once they have you on the phone, they will use high-pressure tactics to get you to buy coins with a higher price, aren't a good value, or might not exist at all.
    • Scammers might try to convince you to buy or sell bullion coins for a different metal that would supposedly gain more value. Don’t be persuaded by what a telemarketer says – do your research.

  • Red Flag: Beware of the “rare coin” scam. 

    • Scammers will use a grain of truth to take advantage of unsuspecting victims. Rare coins can often be a good investment in times of either inflation or recession, but these investments should not be trusted in the hands of a fraudulent dealer. These scammers will prey on fears of big economic downturn to get their hands on your money. 

  • Red Flag: Leveraged Investment Scams

    • This is where a dealer will make you feel like you are missing out on a great deal if you don’t “act fast”. Think carefully and do your homework when you are asked by a dealer to act act fast to take advantage of rising prices. What sounds like a good opportunity is actually a complex and risky investment. You are not buying a coin but investing money. This investment is paid up-front and followed by regular payments that include interest. There is the potential to increase your initial investment, but you should consider the risk of losing more money than you started with. 
    • If a telemarketer or coin dealer suggests sending a certain amount of money for purchasing the bullion and holding that purchase in their vault and safe, ask if the business is bonded or insured. Verify this information and get it in writing. 

  • Red Flag: Act now.

    • Avoid dealers who use high-pressure sales tactics. Don’t fall for pitches that urge you to “act now”! Put the same thought and consideration in purchasing bullion coins like any other investment. 

  • Red Flag: Double your money.

    • Avoid investments that seemingly have no downside or risk. Bullion coins are not immune to rising and falling prices.

  • Red Flag: The dealer will only accept checks or wire transfers. 

    • These transactions are more difficult to cancel or get your money back. Always be wary of giving your credit card information out, but credit card transactions may have more protection.

Do your homework – questions to consider

Shady dealers will use the same tactics as legitimate and trustworthy dealers to get your contact information. Telemarketing is often a favored approach. As with any investment, use the tried and true approach of researching and talking to experts. Avoid investing in products that are unfamiliar to you.

  • What is the melt value? This is widely available and represents the actual, “intrinsic,” value of the coin.
  • Be certain to ask for a guarantee of authenticity for the coin’s precious metal content. Don’t stop there – make sure the document is not a fake. You can research the company who issued the guarantee or certificate.
  • Do they have references? Talk to someone you trust or check out the company online and see if there are any complaints. 
  • Is this investment right for me? Does it meet my long-term goals?
  • Is the dealer licensed with the Department of Commerce? If they are physically holding the coin for you are they properly bonded and insured to do so.

Stop Fraud in 3 Easy Steps

End the call: Don’t be a “courtesy victim.” When it comes to protecting yourself, there is no such thing as being rude. Trust your instincts.

Phone a friend: You should identify a trusted friend or family member you call for questions or advice.

Report the fraud: If you suspect a coin dealer might be fraudulent, contact the Minnesota Department of Commerce. We cannot stop fraud that we don’t know about. Your actions will help protect others who might be victims of fraud. If you have questions or concerns, contact the Department at 651-539-1600 or 1-800-657-3602.