Many people believe that the only way to avoid becoming a victim of a commodity scam is to avoid interacting with a broker. Unfortunately, there are plenty of shady brokers out there. However, you should still be careful. There are a few common warning signs that can help you spot a fraudulent broker. Here are some tips that will help you avoid falling victim to a commodities scam. These signs can help you protect yourself.
First, look for legitimate companies. Some unregulated brokers may solicit your money by posing as the Federal agency that regulates the commodity markets. Often, these companies will direct you to a fictitious exchange, which will wire your money to their account. The truth is, this is a scam. You’ll be left holding the bag. If you invest with an unauthorized broker, you’ll never see your money.
The worst part of a commodity scam is that you’re unable to see the profits you’ve earned from it. A scam broker will tell you that you’ll receive tens of thousands of dollars within a short period of time. They’ll show you a series of different deposit amounts, and will convince you to make more money. Once you’ve invested a lot of money, you’ll soon realize that the earnings are impossible.