Washington, D.C. — The Commodity Futures Trading Commission today issued a Customer Advisory informing the public to be on alert for frauds seeking to profit from recent job losses due to the COVID-19 (coronavirus) pandemic. This is the second advisory the CFTC has issued in response to the pandemic. [See CFTC Press Release No. 8134-20]
Specifically, these frauds may seek to convince customers they can earn unrealistically high profits from home, but later force them to pay excessive “fees” and “taxes” to get their supposed earnings. These frauds typically involve unregistered brokers selling binary options, foreign exchange (forex) programs, and cryptocurrencies. The brokers primarily use social media and messaging apps to target people who have lost their jobs and are looking for replacement income.
“One of the best defenses against becoming a victim of fraud is being informed,” said CFTC Chief Communications Officer and Director of Public Affairs Michael Short. “We will continue to provide the public with resources to help detect and avoid fraud during this volatile period.”
“Tips and complaints from the public are especially helpful in rooting out this kind of misconduct,” added CFTC Enforcement Director James McDonald. “The CFTC will vigorously pursue fraudsters who seek to prey on Americans facing hard times as a result of this pandemic.”
About the Office of Customer Education and Outreach
The Customer Advisory was prepared by the CFTC’s Office of Customer Education and Outreach (OCEO), which is dedicated to helping customers protect themselves from fraud or violations of the Commodity Exchange Act through the research and development of effective financial education materials and initiatives. OCEO engages in outreach and education to retail investors, traders, industry organizations, and the agricultural community. The office also frequently partners with federal and state regulators as well as consumer protection groups. The CFTC’s full repository of customer education materials can be found at: cftc.gov/LearnAndProtect.
Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382) or file a tip or complaint online.
The Customer Advisory is available in full below and on the CFTC’s new coronavirus webpage: cftc.gov/coronavirus.
