If you are interested in investing in commodities, you should be aware of scams. These scams usually take the form of unsolicited phone calls asking for money to invest in futures and options. The scammers may claim to be from a Federal agency that oversees commodity markets in the United States. They will then direct you to a fictitious exchange to wire the money to their bank account.
Forex scams
When you invest in the currency markets, it is very important to know the warning signs of forex scams. These scams are usually conducted by aggressive and unsolicited marketers. These crooks may contact you in the form of high-pressure calls or vague emails. They may offer gifts or investment seminars, and promise super high returns on investments. They may also advertise through popular messaging apps. Traders may also encounter scams in the form of trading groups, which may look like legitimate companies, but promise massive gains in a short period of time.
Many scams involve software that promises high profits. They often offer charts that show the profits only after a certain period of time. Some scammers claim to offer you a free trial. To make sure that you are not falling prey to this practice, always request background information and full disclosure of profits and losses.
Commodity futures trading scams
Commodity futures trading involves buying and selling contracts for commodities at a future date. This is a risky and high-risk business, requiring an investor to be well-versed in the fluctuations of the commodity market. Among the risks are fluctuations in weather conditions, regulatory changes, and the loss of product due to disease or natural disaster.
Scammers often pose as legitimate commodities futures trading companies and lure the public into investing. They often use the internet and social media platforms to solicit investors. Their marketing campaigns often promise to earn profits of 50% or more or a fixed income. These investments are usually not legitimate and are a scam. You may also see advertisements for unlicensed futures brokers on websites and social media pages.
Hyip club scams
Hyip clubs, or HYIPs for short, are investment opportunities that offer high returns without underlying investments. The scammers often make promises of huge profits but do not disclose the details of how the funds are managed. In addition, they use stock images and fake names to entice potential investors.
In the UK, HYIPs are registered with the Financial Conduct Authority, which oversees the activities of finance management companies. They also register with the Companies House under the name of a bank or fund management company. However, scammers can use the registration process to present themselves as limited companies and lure unsuspecting investors into investing.
Common China scams
Commodity scams are common in China, and overseas buyers are frequently caught up in them. These companies often use fake documents to pass off commodities as genuine, such as receipts and bank statements. One recent scandal involved a Chinese metals company, Dezheng Resources, which duplicated fake documents to pledge over $3 billion in assets to 13 different banks.
Common CFTC whistleblower program for victims of commodities scams
As a whistleblower, you can earn monetary awards for reporting fraud. These awards are made based on original information that you provide to the CFTC. For example, if you discovered that someone had been buying or selling an asset that was unregistered, you could receive monetary compensation.
To qualify for a reward, you must submit a Form TCR, which can be electronically submitted through the Commission’s website. Alternatively, you can mail or fax your completed form. If you live outside the U.S., you can also hire a lawyer who will file a claim on your behalf.
Under the CEA, whistleblowers can file a lawsuit against their employers if they are harassed or retaliated against. The Commission can then bring enforcement action against the offending employer.