Commodities scams are often referred to as oil and gold scams. In the last few years, it’s gotten easier for con artists to pose as investors and make sales right under your nose. With all the available information today on the internet, there is no reason to be taken in by anyone posing as a reputable investor. There are some signs you can look for that will help you tell if they are trying to sell you a commodity or not.
How can you tell if you are being scammed? First, you should look for a “commodity scam.” Anytime an investment company makes claims that are similar to those of an oil company or gold company. For example, they claim to have “secret information” or that you can “easily double or triple your investments.” Commodity scams are characterized by vague statements and unrealistic outcomes.
Here’s another clue that you may be dealing with a commodities scams: any company that offers to give you “pre-sold” stock recommendations is also running a commodity fraud ring. These companies usually contact their investors through “investor lists” or lists available from the Securities and Exchange Commission. If you invest in these types of schemes, you could end up with nothing but a big financial loss and possible legal troubles.
Other commodities scams are aimed at ordinary individuals. One popular type of fraud is “wireless cable investment.” This is where an investor is taken advantage of by investment firms that promise to make large returns from wiring consumers with high speed internet. Unfortunately, this type of investment rarely lives up to its claims and in some cases can even cost innocent consumers money. Another common scam is “fool’s gold” – selling worthless coins or bars of gold that cannot be used as currency.
Venezuela has been one of the world’s top commodities scams over the last few years. The government of Hugo Chavez of Venezuela has long used oil company accounts to fund the campaign to take over the country and replace the existing peacefully elected government with a radical left leaning party. Many investors lost money because they believed that the new government would use their oil company stock in order to fund social projects. It was not until the public discovered that Hugo Chavez had actually used their oil company stock to purchase thousands of dollars in campaign expenses that they had any inkling that their investment was a sham. It now appears that at least one company in Venezuela used fake commodities stocks to try to take advantage of U.S. citizens with far less than honorable intentions.
There are other types of fraudulent transactions taking place in the commodities market. One of the most infamous scams is the “dumb deal.” A trader who accidentally trades more commodities than he has available is usually the target of such an investor. Sometimes these “dumb deals” result in nothing but bad trades and losses for hundreds of people, but other times the traders realize that they have been shortchanged and may decide to hold out for a better return.
One of the main features of all of these commodities scams is the fact that they offer no proof of authenticity. In almost every case, the victim is merely enticed by what the sales person says and agrees to purchase or sell whatever it is that they are being told is authentic. For example, some sales people will promise a 10% return on your investment if you will only sell them three commodities. If the commodities that you are selling do not exist, there is no way that these traders can make such a promise. It is very common for people to ask if they can show proof of a transaction before they purchase anything. If the buyer insists on having tangible proof, then it is important that you as the seller act completely in the spirit of what you say.
One of the primary reasons that investors end up getting charged with commodities fraud is that they are trying to get away with their crimes without admitting or denying their guilt. Since the penalties for fraud are so harsh and can range from large fines and jail time to hefty financial restitution charges, a person who is charged with this type of fraud may try to convince the court that what they are charged is actually a clerical error rather than being a clear-cut case of fraud. If you have been accused of this type of fraud, you should contact an experienced commodities fraud attorney immediately. Not only will your chances of defending yourself against this accusation of fraud be much more favorable, but it will also ensure that you receive the restitution you deserve.
Although there are many different types of commodities scams that can occur during the course of any given day on the commodity markets, the most common is the manipulation of the price of commodities. Many people will purposely make purchases on the commodity markets knowing that they are going to sell them for less later, so that they can make a profit by selling at the top of the market and collecting profits from the selling prices. Although this type of manipulation of the commodity markets is considered to be dishonest, it is a form of trading that is widely performed throughout the world. Even though the commodity markets are supposed to be free of manipulation, there are many factors outside of individual players that can affect the value of currencies. In fact, even governmental bodies can manipulate the value of the currency that they are trading.