Via Peter Schiff

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I’ve written sever Fun on Friday articles about gold scams. Usually, the victims are elderly folks and you can kind of understand how they might get fooled by scammers. But you know who I wouldn’t expect to get conned in a gold scam?

Pawnshop owners.

And yet, here we are.

I mean, these people buy gold and take it for collateral every single day. That’s literally their business. You’d think they’d be the last people in  the world you could trick with fake gold.

Apparently not.

I ran across an article a few days ago about a pawnshop in Thailand that got ripped off by gold scammers. According to the story, Krit and Anadda Tianmai, owners of the Thong Tian Nid Gold Shop, lost more than $285,000 when they accepted fake gold chains as pawn collateral. The scammers claimed to be construction workers who need to get quick cash in order to pay workers on their site.

Now, I’ve said before, I’m a pretty skeptical person by nature. But is it just me or does the notion of construction workers pawning nearly $300,000 in gold chains raise some pretty serious red flags? I mean, that’s a lot of gold for construction workers to be hauling around. And you know the gold, if it had actually been gold, would have been worth a whole lot more because the scammers pawned it instead of selling it outright.

According to the story, “when gold is pawned rather than sold, it is not cut into to determine if it is real.”

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So — just a pro tip to all of you potential pawnshop owners out there — if you’re gonna give hundreds of thousands of dollars out in exchange for gold chains, you might want to make sure that they’re real before you hand out the cash. Just saying.

Now, at some point, this did become suspicious enough for our intrepid owners to check out the chains. They cut into them and discovered they were silver coated in gold with gold clasps. But they didn’t do this until AFTER forking over $285,000. This seems a little backward. But what do I know? I don’t run a pawn shop.

At least it wasn’t a total loss. Nothing wrong with having a little silver.

This story gets a bit more curious.

“Over the course of 5 weeks, around 12 people came in to pawn the phony gold.”

I have a little more sympathy upon learning the timeline (which the reporter decided was only important enough to throw in toward the end of the story.) Initially, I thought they loaned out all that money at one time. I can see how you might buy the construction worker story the first time or two. But still, I think I’d start getting a little suspicious at about number two, or three, or 11.

This just goes to the point I’ve made in other scam stories – be careful. If it seems too good to be true, it probably is. And for goodness sake, know who you’re dealing with when it comes to buying gold. Don’t buy gold from some guy from Nigeria who sends you an email or from a dude who walks up to your car window at the gas station.

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Fun on Friday is a weekly SchiffGold feature. We dig up some of the off-the-wall and off-beat stories relating to precious metals and share them with you – with tongue firmly planted in cheek. Click here to read other posts in this series.


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