Are Fund Companies Getting Their Facts Straight?

Sometimes we get information from a fund company's customer-service reps that's outright wrong. Is this happening to you?
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I hate it when people can't get their facts straight. (No, I am not implying that I'm infallible.)

The mutual fund reporters at

TheStreet.com

often call fund company customer-service lines to get details on a specific fund. But lately, we have encountered a frightening amount of misinformation.

For example, yesterday I called the

Potomac Funds

800 number to double-check some information on the

(POTSX)

Potomac OTC/Short fund. I asked about the fund's objective, and the phone rep told me that it was to produce a return that was 125% of the performance of the

Nasdaq 100

, the same as the firm's

(POTCX)

OTC Plus fund.

Wait a minute. A fund with the word short in its name is supposed to produce returns that outperform an index? I asked her to check again. A short fund's performance should be inversely correlated to its benchmark, I said. After much fumbling, she agreed.

Sure, I was annoyed by the episode, but moreover I was worried about the other investors who might be receiving misleading information from fund companies.

I called Terry Apple, Potomac's chief investment officer, to ask him about the incident. Like other small fund companies, Potomac outsources its operations and customer service. If the outside customer-service representatives can't answer a question, Apple says they will patch the call through to Potomac and have one of the firm's professionals talk to the investor. Apple says this is the first time he has heard of this happening. "We've got to look into that. That kind of scares me," he says, adding that he wants to eventually move the firm's customer service in-house.

Potomac is by no means the only fund company where this has happened. And I want to hear about similar episodes from you.

Have you ever received incorrect information from your fund company? When you call a firm's 800 line, are you ever fed details that you later find out are not true? Does it happen often?

I want you to be the watchdog. Send your stories to

fundforum@thestreet.com and include your full name.

And don't spare any feelings.

TSC Fund Forum aims to provide general fund information. Under no circumstances does the information in this column represent a recommendation to buy or sell funds or other securities.