And Other Commodities Consumers should be alert to companies that sell investments in precious metals and other commodities based on sales pitches claiming that customers can make a lot of money, with little risk, by purchasing metal through a financing agreement. Sometimes these companies offer opportunities to speculate on the price movement of precious metals, or other commodities such as heating oil, without actually taking delivery of the commodity. Over the past several years, the CFTC has taken enforcement action against wrongdoers who lured customers to purchase purported interests in precious metals without taking delivery, through various misrepresentations including claims that they would earn large profits with little risk. These companies also pretend to arrange financing for the customer's metal purchase so the customer can obtain a larger profit by controlling a larger amount of metal with their relatively small downpayment.
Companies often discourage customers from taking delivery of the metal.
Sometimes, not all of these fees are disclosed up front. Avoid any company that predicts or guarantees large profits with little or no financial risk. Be wary of high-pressure tactics to convince you to send or transfer cash immediately to the firm, via overnight delivery companies, the internet, by mail, or otherwise. Be skeptical about unsolicited phone calls about investments from offshore salespersons or companies with which you are unfamiliar. Be sure you get all information about the company and verify that data, if possible.