Scammers Pick Pockets with Silver Bars Advertised as “Real Steal”
The headline on the Pittsburgh Tribune-Review website says it all – “Collectors willing to overpay for silver.”
The article highlights an ongoing silver scam in Pennsylvania and other states featuring “US State Silver Bars.”
The offer, made in full-page newspaper advertisements by Ohio-based U.S. Commemorative Gallery Inc., promises ‘a real steal’ at $57.”
It’s a steal all right, but not for the buyer. A Mt. Lebanon, PA financial adviser called the price “insane.”
But in today’s silver market, some people might find these special silver bars tempting. The persistent shortage of silver bullion coins such as the American Silver Eagle makes overpriced products like this seem much more appealing. In truth, they represent just another incarnation of a common numismatic scam. Buyers will end up overpaying for the promise of “valuable,” “rare,” and “collectible” products that will ultimately fail to deliver on the promises.
At $57 per bar, buyers are paying four times more than the current spot price of silver. As the Tribune-Review explains, the company has to spin its sales-pitch to make these overprice “special” silver bars seem more appealing:
And yet, people buy them, tempted by a tone of false urgency (“call before the order deadline ends”) and the suggestion of government-backed legitimacy because of the endorsement of a former U.S. treasurer.”
In fact, no official connection exists between the federal government and U.S. Commemorative Gallery, a privately held company.
The bottom line is that these US State Silver Bars, and countless products like them out there in the marketplace, are not investments. Pittsburgh coin dealer Kitty Litman said they are often barely worth their packaging. “I feel very sorry for people,” she told the newspaper. “It’s a gift item. It’s not an investment.”
Some dealers will use a bait-and-switch tactic to sell products like this. They will advertise a great price for a well-known bullion coin such as a Canadian Maple Leaf. Then when they get you on the phone, they will try to switch you to some other product like these US State Silver Bars. They will use words like “limited edition” and “exclusive design” to make them sound more valuable than they are.
When you invest in gold and silver, you do so for the value of the metal. If you want to buy numismatic products for their aesthetic value, or for your personal collecting enjoyment, that’s fine. But don’t allow unscrupulous dealers to convince you that these “collectibles” are a better investment than bullion. Gold and silver bullion products are always your best bet for investment purposes.
You can learn more about common scams, how to avoid getting ripped off, and how to invest wisely in the precious metals market by reading Peter Schiff’s Classic Gold Scams special report. You can download it for free HERE.
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