If you are about to move retirement money into metal, the real question is how to tell an honest sale from one built to overcharge you. This piece lists nine red flags drawn from regulator warnings, enforcement cases and a Tax Court ruling. For each one, it gives what the pitch looks like, why it costs you and a question that exposes it. It does not rate or name any company.
Regulator warnings center on pricing. The CFTC, FINRA and NASAA warn about schemes that tout overpriced metals and coins, then charge “exorbitant markups, commissions, and fees.” Some schemes never buy the metal at all, which the DC Department of Insurance, Securities and Banking also warns about.
1. Bait-and-switch into collectible or proof coins
The account opens with a bullion offer. Once the money has moved, the salesperson steers you into “exclusive,” “limited mintage” or proof coins that carry a much larger markup.
The pitch often claims collectible coins can't be seized by the government. The CFTC lists that as a lie: “There is no special federal protection for collectible coins.” It adds that if someone sells you higher-priced collectibles for an IRA, “the coins likely are not rare and you’re being scammed.”
Why it costs you: the CFTC’s 2020 advisory puts bullion premiums at 5 to 10 percent over spot, and numismatic coin premiums at 40 to 200 percent. Much of that extra premium can be lost the day you buy. Ask: what is the premium over spot, in dollars per coin, and what would you pay to buy this coin back from me today? The walk-through in proof coins vs. bullion: premiums and resale value shows how that call usually goes.
2. Free-metal promotions
An ad or a caller offers free silver, bonus gold or another gift if you open an account or buy above a set amount.
Why it costs you: the gift is paid for somewhere, most likely in the price of what you buy. The CFTC and FINRA bulletin tells buyers to “ask how the company earns its profit, especially if it appears to be giving away precious metal or offering other big freebies.” Ask: what is the total premium over spot on this order with the promotion, and what is it without the promotion?
3. No itemized written quote
The price is given out loud, or the quote only arrives after you commit. It lacks spot, premium per unit, a total and a fee schedule.
Why it costs you: a markup you never see in writing can be almost anything. A California dealer in a CFTC case led customers to believe its markups would fall between 4 and 29 percent, or 1 and 5 percent, while charging about 92 to 130 percent. The court’s 2024 order found that at least 950 people paid over $69 million for coins worth only $30 million. Ask: will you email me an itemized quote before I agree to anything? The CFTC advises buyers to “insist on getting all fees in writing.”
4. Manufactured urgency
A price that “expires today,” a coin “about to sell out,” or a claim that metal is in short supply.
Why it costs you: a deadline cuts off the comparison shopping that would expose a high price. The CFTC’s fraud advisory names “creating a false sense of urgency by claiming limited supply” as a warning sign. Spot prices move all day, and a retirement-account transfer takes days to complete in any case. Ask: if I call back next week, what will change apart from the spot price?
5. Being handed off to a “lead trader” or special expert
A first caller sizes you up. If you show interest, you are passed to a “lead trader” or expert who works with you one-on-one.
The CFTC and FINRA bulletin describes exactly this: operators “might hand you off to their ‘lead trader’ or a special expert.” It says the salesperson is usually “not qualified to give trading, investment, or tax advice.”
Why it costs you: the title borrows authority the person may not have, and you act on advice from someone paid on commission. Ask: is this person and company registered with the CFTC, SEC, FINRA or your state regulator? You can check through the CFTC, FINRA BrokerCheck and the SEC’s adviser search.
6. A custodian or storage arrangement you can’t verify yourself
The seller supplies the custodian’s contact details, or offers to hold the metal somewhere you cannot check directly.
The joint CFTC, FINRA and NASAA warning says “Fraudsters might use a fake self-directed custodian.” The CFTC’s fraud advisory warns of dealers that “do not store metal with an independent bank or storage facility, but charge storage fees.”
Why it costs you: if the custodian or storage is not real, the metal may not exist and the fees buy nothing. Ask: call the custodian yourself, using contact details you found independently, and ask the depository to confirm your holdings in writing.
7. Scare forecasts, promises of gains, and borrowed trust
Predictions of collapse or confiscation, promises that the metal will rise, and trust borrowed from a shared faith, a political view or a famous face.
The CFTC says dealers “use scary forecasts to instill fear, create false urgency, and pressure you to buy.” The DC regulator says scammers claim the metal will rise in value and often promise it will double. The joint warning adds that these scams target people “with specific political and religious beliefs” and steal images of religious leaders, pundits and celebrities “to create fake endorsements.”
Why it costs you: fear and loyalty replace the price check. Metal prices fall as well as rise, so any promise of gains or a price floor is a promise nobody can keep. Ask: will you put that prediction or promise in writing, signed by the company?
8. Home-storage and checkbook-LLC pitches
A pitch that you can set up an LLC owned by your IRA, buy coins through it and keep them in a safe at home.
Why it costs you: in McNulty v. Commissioner, 157 T.C. 120 (2021), the Tax Court held that an IRA owner who took home American Eagle coins bought this way “received taxable distributions from her self-directed IRA equal to the cost of the AE coins upon her receipt of the coins.” Penalties were upheld too. More detail is in what the home storage rules actually say. Ask: which approved depository will hold the metal, and who is the trustee?
9. Blanket “IRA approved” badges
A product page or salesperson labels a coin “IRA approved” with no reference to the rule it meets.
Why it costs you: if a coin doesn’t meet the rule, the purchase can count as a distribution. The CFTC notes that “only certain bullion coins can go in an Individual Retirement Account.” Under section 408(m)(3) of the tax code, bullion must meet an exchange fineness standard and be in the trustee’s physical possession, and certain US coins are named directly. Ask: which part of the rule does this product meet, and will my custodian accept it? More detail is in IRA-eligible metals.
How can I verify a dealer and avoid gold IRA scams?
Check the salesperson’s registration, the dealer’s complaint history, the custodian and depository it uses, and its written buyback terms, then take the quote to a licensed adviser.
- Search the dealer with your state attorney general and the Better Business Bureau, and read the substance of complaints rather than the letter grade.
- Ask for the custodian’s name and confirm the relationship with the custodian directly.
- Ask which depository holds the metal, and whether your holding is allocated or commingled.
- Get the buyback policy in writing, including whether it is a commitment or a courtesy.
- Share the quote with an adviser. The CFTC tells people not to use retirement money for metals “without first consulting licensed or registered financial, tax, or legal advisors.”
The CFTC and FINRA list of 10 things to ask covers the same ground, and our ten questions that end bad sales calls are written to be read aloud on any call.
What does a clean quote look like?
A clean quote states the spot price used, the premium over spot in dollars per unit, the number of units, the all-in total and the account fee schedule, on a document you can keep.
If any of those five parts is missing, ask for it before you agree. How to read a quote walks through a line-by-line example.
Dormy, Inc. is a Florida precious metals dealer. We source and sell gold, silver, platinum and palladium. For metal bought outright, we arrange depository storage. For IRAs, we help coordinate between you, your account administrator and your IRA custodian during setup and funding, and the metal is kept by the custodian at an approved depository. We do not give tax, legal or investment advice.
Speak with a Dormy specialist, no commitment.
If you have a quote from anyone and want to go through it line by line, we will walk through it with you.
Speak With a Specialist →This article addresses industry-wide practices and public guidance, not any specific company, product or spokesperson. Rules change and individual situations differ; consult a qualified tax professional before making decisions involving your retirement account.