ResalesPut The Freeze On Heating Oil Scams
Try to make up for rising home heating oil prices by investing in commodity futures that promise to warm up your portfolio and you could lose your flannel shirt and suffer an especially frosty winter.
It"s a lot wiser to put aside extra cash for what could be a more expensive heating oil season this year, instead of being suckered by scams promising returns on heating oil and other commodity futures.
The U.S. Commodity Futures Trading Commission (CFTC) has issued a consumer advisorywarning the public to chill out on companies promising to triple and quadruple your money with heating oil and other commodity futures and options trading based on the possibility of higher heating oil costs in a war with Iraq. The commission is the federal regulatory agency for commodity futures and options contracts trading.
The CFTC recently brought actions against commodity brokerage firms and brokers soliciting customers with claims investors could earn large profits with little risk based on media reports on world events.
The commission says the pitches come via spam, telemarketing efforts, online ads, Internet chat rooms and broadcast ads on television and radio.
Increases in demand or supply limitations for a particular commodity could affect price, but traders anticipating price changes factor in the the extra cost preventing those factors from affecting the futures or option position on commodities. Market professionals have already factored in to current prices the possibility that war with Iraq could disrupt future supplies of oil an oil products, the commission said.
Unless you are rube looking to be fleeced, take these precautions before placing your funds with any company that offers leveraged or financed commodity transactions for heating oil or other futures.
Avoid any company that predicts or guarantees large profits because of well-known current events, published reports or predictable, seasonal changes in demand. If it appears too good to be true, it probably is.
Avoid any investment that promises big returns with little or no financial risk.
Scrutinize unsolicited telemarketing phone calls, e-mails and other advertisements about investments, especially those from out-of-state salespeople or unfamiliar companies.
Take the air out of high pressure sales efforts (to quickly obtain your cash by overnight mail or the Internet) by ignoring them.
If you are suspicious, before you invest, contact the CFTC, the National Futures Association, your state attorney general or the Better Business Bureau.
To verify claims get written documentation about commodities and options products, the company, its track record. Before investing, check out any company with someone whose financial advice you trust.
Let doubt be your guide. If information about the company isn"t forthcoming don"t give them your money.