By Markus David
Director of Professional Services
MyChargeBack
You may have heard this investment advice on CNBC, at a cocktail party, from a neighbor, or on the web – ”Buy gold as a hedge against inflation!” “Gold is a buy when the economy is bad,” “Gold is the best long-term investment you can make – and it’s always worth something!”
This may sound like good advice, but as with any trading thesis, there are legitimate opportunities as well as those who are out to take advantage of new or speculative investors.
In the past year, a ring of financial cybercrime has been uncovered in China. One component of this cluster of frauds, including crypto scams, is a pig-butchering gold trading scheme.
Gold Trading Scam Meets Pig Butchering Fraud
If you aren’t familiar with the term “pig butchering” from our previous Industry Insights, this vividly-named scheme involves attracting investors, building a false sense of trust, and nourishing relationships for the long term. The idea is they will fatten their accounts so the fake broker can eventually take their money while the victim goes to the slaughterhouse.
This pig-butchering gold scam could have fooled even relatively experienced investors. It used the MetaTrader 4 platform, which is usually offered by legitimate brokers and trading platforms. Also, they counterfeited a bank website that allowed users to download apps in Android, Windows and iOS. This might have been enough to create a veneer of respectability.
They clothed their fraud within mainstream technology, an apparently genuine bank website, and a trading thesis that anyone can find on Motley Fool or CNBC – buy gold if you think the economy is heading down.
These scammers reaped dubious gains not just from the funds that their victims traded, but demanded reams of information, including photos of driver’s licenses and tax identification, such as Social Security numbers.
Not only did they make a lot of money directly from victims’ deposits, but they could hack into their other accounts and steal even more money.
All That Glitters Isn’t a Gold Scam
This story shouldn’t deter you from trading gold, especially if you believe tough economic times aren’t going away any time soon. However, it’s important to be careful and do thorough research to determine whether you are dealing with a real entity or a gold trading scam.
The U.S. Commodity Futures Trading Commission (CFTC) released information about what to look out for before getting your money locked up and lost in a gold trading scam (and any broker scam for that matter):
- No or fake licensing information
- The website URL doesn’t match up with verifying information (that is an indication of a cloned website)
- Guaranteed returns
- Shares a trading thesis that can be found everywhere on financial media (remember that, for trading to work, the word can’t already be out)
- Asks for an excessive amount of information, such as a photo ID or a Social Security number
- Creates a false sense of urgency to keep you from checking them out
- Short on information about the broker and their credentials
- Sketchy terms and conditions or lengthy ones that benefit only the broker and not the client
- Encourages additional deposits but is not interested in granting withdrawals
- Ties up customer accounts with fake bonuses that can’t be claimed without a huge training volume
- Poor and inconsistent communication
If you notice any of these problems, close your account and ask for a withdrawal immediately. However, if you are dealing with a genuine gold scam broker, they probably won’t be too quick to return your money. That’s when you need assistance from MyChargeBack experts.
Can I Get a Chargeback or Fund Recovery from a Gold Scam Broker?
Gold scams, just like any other type of online trading scam, can be tricky. However, if you’ve paid by credit card or wire transfer, fund recovery can be straightforward, since we have some way of tracking down the individuals involved. We can get you started through the chargeback process and can bolster your case with the issuing bank.
If you’ve paid in cryptocurrencies, MyChargeback experts will guide you through the crypto recovery process, which involves a crypto investigation and crypto reports that you can present to law enforcement.
MyChargeBack Will Help You Find Your Funds on the Blockchain
If you have lost money to a cryptocurrency scheme, seek fund recovery assistance right away. Consult with MyChargeBack experts and get started with your fund recovery claim. We have extensive knowledge and working relationships with regulators and more than 450 law enforcement agencies around the world, as well as solutions that can improve your prospects of getting your cryptocurrency back.
