When you find a great looking company, it doesn't mean you can buy gold and silver safely from them.
When someone wants to scam you they will make themselves visually appear as legitimate as possible to generate sufficient confidence (note the root word 'con') so that you do transact with them, so you need to dig under that façade.
When a company has a problem, they don't advertise it so you need to find if an issue exists. So how do you go about doing that?
Due diligence is the process of investigating someone/thing to the point that you are comfortable that:
This is an especially important process, especially when you want to buy gold and silver safely. When it comes to gold investments a lot of fraud occurs as it's an easy target, usually due to:
Your first assessment should be comprehensive one. Thereafter, as and when you want to make another purchase, do a quick check to make sure that nothing has changed. That way, every time you will buy gold and silver safely.
So how do you go about doing it?
The first thing you need to establish is some concrete details on who you are dealing.
A company's website is always good place to start. This is because normally the name of who website is registered to, and the address that it is linked to it are publicly listed. You can search for those details by typing in the domain name on the website www.whois.com.
Most domain endings like '.com' allow you to apply a privacy protection service which prevents your registered name from being displayed.
A legitimate public facing company has no reason to hide name details, be it a director's name or the registered company name. It is also in their interest that you buy gold and silver safely.
You then start matching the Whois information against other publicly accessible sources. The first thing to check is the Whois registered address against what the company is advertising on their website (remember they may have more than one office location).
Also, as standard, company websites should also display the legal registered address for their company somewhere.
Possibly the most important part of ensuring that you buy gold and silver safely is doing a ratings and credit check on the company / person you are wanting to deal with.
So with the information in hand gained from above, we progress...
Most governments have an on-line database of registered companies that you can access and pull up basic information.
If the county doesn't have a portal to search then the relevant department can still be contacted for confirmation.
A list of the different company registers around the world are found on the following Wikipedia page.
You need to check at the country where the company is registered. Sometimes the most that will be confirmed is:
The above is sufficient enough to confirm that the company officially exists.
Confirmed? Good, let's move deeper...
For companies that are based in North America, the best place to start your search is the BBB. At the BBB you will find information about complaints, customer reviews and problems such as court judgements.
Be aware that when you search many companies have 2 names:
If your search doesn't turn anything up. It doesn't mean they don't exist as it could be they haven't been rated yet or are very new - either way take extra caution.
To get an idea of what is provided have a look at Google's BBB file.
For bullion and coin dealers the complaints you want to look out for to buy gold and silver safely include the following:
Just because a complaint has been lodged, don't blindly write-off that company (unless it was something bad). What really counts is the number of successfully resolved complaints and speed of it being dealt with.
Everyone can have a bad day but it requires professionalism to fix an honest mistake (but too many bad days indicates deeper problems). So try to objectively consider the matter of the complaint and it's speed of resolution.
If the company is not in North America then you need to do a quick search to find a credit checking agency that covers their county.
Dun & Bradstreet have good coverage for several countries.
They say they over 235 million companies listed globally and over 53 million professional contact names.
Now you have gotten this far, as a final act, just do a general Google search on the company.
Type in the company (Trading) name along with the words like 'review' or 'scam'. This should clear up any lingering doubt about the legitimacy of the company or any concerning issues.
Now that your investigative skills could give Magnum, P.I. a run for his money, you should now be in a position to go and buy gold and silver safely.
Just remember to do the credit checking each time before you buy with the same company as their circumstances can change quickly without you realising.
Now give your new analytical skills a test on GoldVu, or you can learn about a type of gold scam that this process doesn't work on, which is to do with Gold ETF Funds.