Indium & 'Strategic Metals Scams

This page is a copy of consumer information presented by the Federal Trade Commission and is presented in the hope that it may assist visitors to Mineral Business Appraisal's site in making a more informed decision about potential mining project investments. In some areas comments or other information has been added by Mineral Business Appraisal. This information is in italics.

What is indium? You may learn the hard way if someone calls and says, "This metal is the hottest investment today. Invest immediately! "If you do invest, you may join a growing number who have lost thousands of dollars to telemarketing firms that sell "strategic metals," such as indium, germanium, selenium, or cadmium. Many of these firms are located in Canada. The telemarketers have sold the metals at prices that far exceed their worth. This brochure explains the sales tactics of the fraudulent telemarketing firms and how to protect yourself from them. It also lists resources you can use for inquiries or complaints.

Part I: "Buy Now!"

The scam unfolds like this. A telemarketer calls offering you indium as an investment that promises little risk and high returns. If you're reluctant to buy, the telemarketer may send you an impressive-looking brochure or even a video cassette that exaggerates indium's worth.

Indium is a byproduct of zinc. It's used in digital screens (on watches and computers), architectural glass, and fire sprinklers. Because indium also is used by the defense industry, it sometimes is called a "strategic metal. "The term "strategic metal" may be confusing to the average investor. It may sound glamorous, and the fraudulent telemarketer may capture your attention by talking about new high-tech applications for indium.

These telemarketers may claim that the demand for indium is growing while the supply is dwindling. They may explain that the U.S. imports most of its indium and that the overseas producers are threatened by political or economic problems.

These claims are false. There is no shortage of indium, and there are no forces that are driving up the price. Foreign suppliers of indium include countries like France, Italy, and Canada. Indium currently is selling for about $5 per ounce, but telemarketers have sold it for $80 or more for that amount. Worse yet, it's unlikely investors could ever resell their indium at any price. First, indium is an industrial-use metal, not an investment metal. It is not traded like a commodity or stock. Second, even if you found a company that uses indium, it probably would not be interested in buying your small supply. Because you would not be able to guarantee the quality of your indium, a company probably would not want to pay to do their own analysis.

Part II: "Buy More!"

If you buy some indium, your name may be traded on what is called a "sucker's list." The telemarketing firm that sold you the indium, or a different one, will call to give you updates on indium's latest selling price. Of course, each update will show a higher selling price. Because you believe the price of indium is rising, you may not suspect any problems with your investment. Most likely, one or more companies will try to pressure you into buying more indium to close a deal with an alleged buyer of your supply. For example, if you have 300 ounces of indium, you may be told that the "buyer" only wants to purchase quantities of 500 or more. However, if you buy more indium, you will only lose more money. The so-called "buyer" will disappear.

Part III: "Good-bye"

If you ever discuss selling your indium with the telemarketers, they may stall your action by telling you the price hasn't peaked yet or that you still need more indium for your portfolio. If, at some point, you discover you paid too much for the indium, you may find that the sales representative who was so eager to sell you indium before is no longer available to talk to you. Your phone calls may not be forwarded or your messages returned. Some companies often ask for the purchase money by wire because it's difficult to trace who receives the transfer. Others may shut down quickly, running with the money that investors have paid. It may be impossible to get your money back, especially if you're dealing with a foreign company.

Before Parting with Your Money

Be extremely cautious if someone calls offering to sell you indium or any other strategic metal as an investment. For general information, or to register a complaint against a telemarketing company, you may contact: National Fraud Information Center Consumer Assistance Hotline 1-800-876-7060 9:00 a.m. - 5:30 p.m. EST, Monday-Friday

You also may file a complaint with the agencies listed on the next page. When writing to register a complaint, include a complete history of your involvement with the company. You should enclose copies of all letters, brochures, or other material you received from the firm in addition to any correspondence you may have sent.

Federal Bureau of Investigation. Check your telephone directory for your local FBI office

Federal Trade Commission Telemarketing Fraud, Room 200 6th Street and

Pennsylvania Ave., NW Washington, DC 20580

Please note that all Government Consumer Information Brochures appearing at this site are public domain documents and may be freely copied at will. We claim no copyright in the content of these documents.

Discuss your mineral property appraisal, mining business valuation, or other mineral industry related concerns with Mineral Business Appraisal:
Michael R. Cartwright  michael@minval.com
Five Claret Court, Reno, NV  89512-4744
Tel/Fax: 775-322-9028

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