For Release: November 3, 1998
CFTC RELEASES CONSUMER ADVISORY WARNING ON SALES PITCHES BASED ON SEASONAL DEMAND AND OTHER PUBLIC INFORMATION
CFTC Advisory Warns that Firms Making Seasonal Demand Claims Often Use Radio/TV Advertisements, As Well as Infomercials, to Promote Commodity Futures or Options, Promising Quick Riches Such as Turning $5,000 into $20,000 in Just a Few Months
WASHINGTON -- The Commodity Futures Trading Commission (CFTC) today issued a consumer advisory warning the public about firms that lure consumers to buy commodity futures or options through claims that they can make a lot of money with little risk based on predictable seasonal demands, published reports, or well-known current events.
The CFTC's advisory reports that companies making this claim often use advertisements on radio and television, as well as infomercials – program-length television commercials – to promote commodity futures or options. These advertisements promise quick riches – such as turning $5,000 into $20,000 in just a few months – by rushing into the commodities markets in advance of seasonal changes in the demand for certain commodities or well-known current events. The advisory explains why this sales pitch is false – namely that the market has already taken into account all known or predictable conditions, such as seasonal changes in the demand for a commodity or well-known information.
The consumer advisory alerts the public to warning signs of possible fraudulent activity and offers precautions individuals should take before committing funds. The advisory may be accessed through the CFTC's Web Site at www.cftc.gov. Questions concerning the advisory may be addressed to the CFTC's Office of Public Affairs at (202) 418-5080.