CONTACT

Jenna Davis/Communications Director
Better Business Bureau of Southern Colorado
Telephone: 719/636-5076 Ext.118
Fax 719/636-5078
Email: jennad@bbbsc.org

More Consumers Are Investing In Commodities Online-Beware!

According to the U.S. Commodity Futures Trading Commission (CFTC), there is an increase in the number of scams that falsely promise high profits with low risks. Scams artists also target ethnic communities, using consumers’ native languages.

The CFTC suggests that consumers carefully investigate any firm that offers to sell commodities or commodity futures or options through phone solicitations or online sales and advertising.One Boulder, Colorado company, Qi2 Technologies, Inc., has settled with the CFTC after it found the company used “misleading advertising on the Internet.” Qi2 Technologies’ owner, Roy Sidewitz, was apparently touting substantial profits from using his trading systems and services sold over his Cyberlink.com website. CFTC accuses Sidewitz of basing his performance (returns) records on simulated or hypothetical trades rather than actual trades.

This is a growing trend! Internet companies might be selling precious metals, such as silver or gold, or foreign currency, such as Euros, Yen or Deutschmarks. They also might be selling other commodities such as crude oil, heating oil, unleaded gas, or agricultural products such as corn, soybeans or cattle. The firm might offer to manage your money for you to trade in commodity futures or options, or to pool your money with other customers. If a firm offers any of these investments, and promises high profits and low risks, or claims that they have made profits for all of their customers, you should not believe them without proof. The commodities and futures markets are very risky, and you could lose your entire investment very quickly.

If you are solicited by a company to purchase commodities, the BBB and the CFTC suggest you:

• Stay away from opportunities that sound too good to be true. Be especially cautious if you have acquired a large sum of cash recently and are looking for a safe investment vehicle. Retirees with access to their retirement funds may be attractive targets for fraudulent operators. Scam artists also track the books you buy. So, if you’ve purchased an investment book lately and receive an email or call about investing, be wary.
• Watch out for companies that guarantee profits, or that tout extremely high performance. In many cases, those claims are false or based on hypothetical trades. Get all the information about the company and its track record, and verify the data. If you can, before you invest with any company, check the company's materials with someone whose financial advice you trust.
• Avoid companies that promise little or no financial risk. Be suspicious of companies that downplay risks or state that written risk disclosure statements are routine formalities imposed by the government
• Be wary of high-pressure efforts to convince you to send or transfer cash immediately to the firm, via overnight shipping companies, the Internet, by mail or otherwise.

If you suspect fraud, contact the BBB at 719-636-1155 or visit our website at www.bbbsc.org. Check to see if your commodities broker is registered with the CFTC by calling 800-676-4632 or by visiting their website at www.cftc.gov. Be sure to report any suspicious claims!