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I am just too trusting a person.

Because I try to be conduct all my businesses at the highest ethical level possible, I just assume others do the same.

That assumption has gotten me in almost hot water multiple times.

Fortunately something seems to always intervene at the last minute and save me from my foolish ways.

Call it a scam guardian angel perhaps.

If you missed the original post of me listing all the previous scams I fell for, check out “A Sucker Is Born Every Minute: Case Study In The Art of the Scam.”

The next scam I fell for was already in progress when I was writing that particular post but I did not include it because I did not have the final outcome yet.

Well today (at the time of writing this post) I am happy to say that I do indeed have a final resolution and wanted to share the experience with you.

Did my lucky streak of averting scams at the last minute continue?  Or is this the time that I finally got scammed out of actual money?

You will just have to read on to find out.

The background.

My colleague is a gold bug and always mentions that I need to add some to my portfolio as a potential hedge against inflation, etc.

A fellow physician blogger who I respect, Gasem, who blogs at MD on FI/RE, has also mentioned that gold is something that he adds in his portfolio, along with Bitcoin, for diversification.

After reading more and more on the subject matter I decided to dip my toes in the gold pool.

I initially invested in “paper” gold via the GLD ETF.

However investing in a gold ETF is not without its issues, namely potential custodial risk as well as increased cost via the expense ratio charged.

My colleague insisted that I should try to purchase at least some proportion of physical gold.

The issue with physical gold is that it is much harder to come by.

A friend who happens to be a local coin dealer says that as soon as someone sells him gold bullion it is swooped up by other investors.

In my mind I had an amount I wanted to accumulate but it was difficult to do so via local sources.

I then turned to online avenues that I hoped would ease the supply constraint.

A fool and his money are soon parted.

I really should have dealt with only reputable dealers of bullion, such as APMEX, but when I started looking I saw that these dealers were charging a considerable premium over the spot price.

Being the frugal shopper, I explored other possibilities.

Big mistake.

It just so happened that on my Facebook marketplace there was a listing selling 1 oz gold bullion from the Canadian Mint.

The seller classified himself as a gold dealer (under his profile title on the Facebook Marketplace) who had a store of gold bullion from the APMEX vault that he was in the process of liquidating.

His listing had pictures of all the gold bars he currently had available.

He was also selling at the spot price of gold with no extra premium charged.

Bingo!  I thought I found a great solution.

I contacted him and got into a discussion with him via the marketplace messenger.

At one point I even sent him a Facebook friend request which he accepted and I was able to do a deeper dive on him.

I felt comfortable enough that I thought I would do a trial and order a 1 oz gold bar from him.

I said if things went well I would be a future buyer of a portion of his stash.

He took a closeup picture of the actual bar I would be getting including the serial number and said it was sealed in its original packaging from the Canadian mint.

Ignored Red Flag.

A potential red flag that cropped up was the how the transaction was to be settled.

Facebook marketplace has a payment system via PayPal that protects the buyer and seller from fraud.

This gave me more confidence in the purchase because of this extra security layer provided.

However despite multiple attempts, I had issues trying to pay his invoice via the Facebook PayPal system.

Facebook PayPal would continue to state that this transaction could not proceed because of some error.

I tried so many times to send payment that I must have triggered a suspicion for fraud and my account actually got locked.

It took a little bit of effort to have my account reinstated with Facebook PayPal by going through a convoluted path chatting with Facebook representatives.

Even with my account reinstated I was not able to use Facebook PayPal to complete this transaction.

The seller then suggested I use Cash App to send payment.

I have never used Cash App before but upon researching it I realized that this method of payment would eliminate my security blanket of fraud protection that Facebook PayPal had offered.

Payments via Cash App are analogous to just handing over cash to that person with no means for legal recourse in case you became the victim of fraud.

I was very hesitant to use this method of payment and expressed my concerns to the seller.

I asked if he had a personal account that I could send the payment via traditional PayPal which would still offer me protection.

The red flag was raised a little bit higher when he replied that he had bad experiences with PayPal before when there was a delay in payment and other issues on a prior transaction and he did not want to deal with that company again.

It amounted to a request to pay via Cash App or else this would not go through.

After a few days he contacted me saying that his inventory was going down and if I still wanted to buy the gold bar or not.

I finally caved in and uploaded the app on my phone and sent payment via my bank.

The next red flag.

The seller acknowledged receipt of the funds and said that he would get it out in the mail right away and provide me with the tracking number.

A week passed and I heard nothing.

Messages via the Marketplace chat were ignored.

I thought at this point I was scammed but lo and behold the seller popped up a few days later and apologized saying he had an issue with his girlfriend who attempted to kill him (she was now in jail) but he had been tied up with the police throughout the process.

Yes it was a far-fetched story but I figured if I was going to lie about something I would not concoct something this outrageous.

I therefore thought he must have been telling the truth.

No harm no foul and I said I was okay with this unavoidable delay.

There were a few other interesting tidbits about the seller mailing the package.

On one occasion he arrived at the post office and apparently he had to go back home to get something needed for the package and by that time the post office had closed.

These delay tactics added almost a month to the previous expected delivery time frame.

Finally the seller took a pic of him at the post office mailing the package with the gold bar and serial number displayed.

I received a tracking number shortly after and I thought this escapade was finally about to end.

Oh how wrong I was because the adventure was just beginning.

It begins.

I finally received the much anticipated package.

I opened up the box and much to my relief there was a shiny gold 1 oz bar from the Canadian mint inside, fully encased in plastic and with a serial number matching the seller’s original photo.

It truly looked a genuine bar with exquisite craftsmanship.

 

 

Still I had to verify its authenticity to have peace of mind.

I went to my coin dealer friend’s shop the next day and asked if he could indeed authenticate this item.

He placed my bar on his fancy contraption that is used to detect the type of metal being sampled.

I knew something was up when he approached me and said that the item did not test as a genuine bar of gold and showed me the display.

He also told me that he thought something might be wrong when he saw the bar which he said was a bit thicker than what he was accustomed to in the past (he did not have a sample on hand to compare it to).

Crestfallen I contacted the seller and explained that the gold bar appeared to be fake.

Hoping this was some kind of mistake, I asked what could be done about it, going as far as requesting a refund.

From friend to foe.

The seller, who up until this point had been quite cordial, had a change of personality and became accusatory.

He said how does he know if I did not switch out the bar myself (and somehow copy the serial number in such short time) and now trying to con him.

He asked if the package it was mailed in looked like it was tampered with (insinuating that someone along the delivery chain would have opened the package, taken out the real bar of gold and somehow have quick access to a fake bar of gold with identical serial number to replace it with).

He also asked if the plastic around the bar looked it had the seal broken (it hadn’t).

He then insisted the bar had to be genuine because he had it shipped directly from the APMEX vault to my address (this was clearly a lie as based on our current interaction I knew he had the bar in his possession and taken a picture of him sending it from his local post office).

He then said that, because he could not trust me and would go out of business if he refunded every customer that claimed a bar was not genuine, I should mail him back the bar and he could then have it analyzed and initiate a claim with APMEX.

I told him if I did that I would be handing back the only evidence for my claim and would then have to trust him to do the right thing, a trust I said that had already been broken.

At this point he said in that case there is nothing I can do for you and essentially told me good luck if I tried to sue him.

 

 

At this point further communication was abruptly terminated as the seller apparently blocked me from the marketplace messenger system.

I gave the seller one last opportunity to right the wrong and sent a request for a refund via Cash App.

This Hail Mary attempt was promptly shot down with a quick seller declined response.

I also attempted to go through Facebook Marketplace channels to see if I had any recourse but unfortunately, because I had gone outside their normal payment channels, I was told I was out of luck.

Down but not out.

I really had no plans to sue the seller.

Legal fees as well as increased hassle of dealing with an out of state issue did not make it worth my time to have a case presented in small claims court like the seller suggested.

No, I had a different plan of attack that hopefully would wipe the smirk of his face and take his gloating down multiple notches.

I had several things going for me.

One was the amount of dollars involved for the fraudulent bar classified this as a potential felony criminal case.

To add even more weight to the case was the fact that I had pictures of the seller mailing the fake bar using the United States Postal service (the bar was placed with serial number in full view next to the mailing label and tracking number).

Because the USPS was the method of delivery for this counterfeit item, another felony charge could be added which was mail fraud.

One smart thing I did, amongst the numerous foolish missteps, was to screenshot the entire Facebook chat conversation, the Cash App transaction, and all the photos the seller had shared with me prior to contacting the seller about the issue.

I did not know if the chat would disappear after the transaction was over or after the seller blocked me (for the record the entire chat never disappeared).

The fates smiled upon me.

It turns out that befriending the seller on Facebook was a very fortuitous thing for me.

The seller’s name was a relatively common one, but, armed with the personal information etc that I found on his personal Facebook pages, it was easy to pinpoint the culprit.

I contacted the local police department in his city and explained my case.

They wanted me to first file a police report with my own local police department and then send the report to them when it was done.

I went through all the steps necessary and then sent out a padded envelope that included a CD containing all the media I had gathered for the case, my local police report, the fake gold bar, a letter from the coin dealer stating he tested this item as fake, and a letter I wrote detailing the issues at hand, as well as the rationale that the seller should face at least two felony counts.

The police detective in charge of my case was very helpful and kept me apprised of the situation.

He told me he interviewed the seller and explained to him that he was looking at facing two felony charges.

Apparently this was too much for his “lawyer always on retainer” to handle and the seller had an immediate change of heart.

The police officer told the seller to go to his bank and get a cashier’s check payable to me for the amount in dispute.

The police officer told me the seller actually came back with a cashier’s check which the officer verified as genuine, but that there was a transposition in the letters of my name.

He then made the seller go back to the bank and get another cashier’s check this time with my name correctly spelled.

The cashier’s check was handed to the officer and the police department then mailed me the check via certified mail.

I am happy to say I have been made whole as the funds have officially cleared from my mobile deposit.

Crisis averted!

Learning Points.

Con artists play to our weaknesses.

Most of us are very trusting and con artists exploit that trust to their benefit.

A huge red flag that should not be ignored is if there is a suggestion to change how an item should be paid for from a payment system that offers buyer protection to one that does not.

I still do not know if the seller purposely entered some error for his account that caused the Facebook PayPal to deny the transaction each time, forcing buyers to resort to less secure methods of payment.

By using Cash App it was like I was literally handing over cash.

You would not buy a watch in a back alley using cash and expect you are getting a genuine Rolex.

Even if you have been scammed, there are creative ways for you to at least have a chance at getting your money back (as long as you have proper documentation, etc).

My decision to go through the criminal system via a Police Department was far more effective than if I pursued a case through the small claims court system (and as an added bonus did not cost me anything other than postage).

 

 

I would love to say that this will be the last time I fall for a scam (and who knows,  maybe it is).

Odds are however that I will likely add to this growing list in the future.

 

 

Note:

If you are in search of financial help, please consider enlisting the service of any of the sponsors of this blog who I feel are part of the “good guys and gals of finance.”

Even a steadfast DIY’er can sometimes gain benefit from the occasional professional input.

 

 

-Xrayvsn