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Be wary of unsolicited approaches via phone, social media, email or text that offer unrealistically high returns. Legitimate investment professionals generally rely on referrals from existing clients and often work through them exclusively.
1. They don’t have a website
Keep this saying in mind when considering an investment offer that seems too good to be true: fraudsters frequently create or alter social media profiles or email addresses, use falsified credentials and pretend they represent investment professionals or firms. Furthermore, fraudsters may send out fake public reports using the name and CRD number of an investment professional while linking back to an unregistered broker-dealer with FINRA.
Scammers target investment opportunities through affinity fraud, using people with community ties as targets of affinity fraud. Pump and dump schemes employ social media to artificially inflate stock prices with fraudulent share purchases and sales by fraudsters using pump and dump schemes; unsolicited approaches including unwelcome phone calls, emails or texts and pressure to invest quickly should be treated as red flags by legitimate investment companies which prioritize open communication without pressuring you into making quick decisions quickly. Scammers usually tailor their pitches around current events or headlines while exaggerating or downplay risk factors when making pitches which may also exaggerated or underplay risks factors altogether.
2. They don’t have a phone number
Genuine investment firms emphasize open communication with clients. If a firm approaches you out of nowhere with only mobile phone number and post office box address information available to them, that should raise some red flags.
Reluctant entities or people should also raise a red flag as this could indicate they’re trying to conceal something.
Fraudsters use social media platforms like Twitter and Facebook to spread false information by disguising themselves as legitimate sources. Fraudsters also employ affinity fraud techniques that take advantage of trust between groups with shared ties such as ethnicity, nationality, religion, age or sexual orientation or military service ties. Be wary and don’t be easily duped by testimonials with high returns or celebrity endorsements – always conduct thorough research before investing or seeking second opinions from trustworthy sources.
3. They don’t have a physical address
Be suspicious if someone requests you invest money or cryptocurrency via wire transfer or check payments and provides contact details that do not correspond with firm records or regulatory warnings. Furthermore, take caution if they require you to keep their investment secret from friends and family and discourage discussing it openly.
Fraudsters utilize social media platforms to engage in community-based investment fraud (also known as affinity fraud). These crimes target members of groups with shared identities such as ethnicity, religion, age, sexual orientation or military service and may enlist group leaders as tools in spreading the scam.
Scam artists are experts at passing off as genuine investment professionals or firms. Look out for discrepancies or red flags such as guaranteed returns, unregistered products, complex strategies, account discrepancies and pressure tactics as warning signals. Search online for names of persons or companies offering investments – pay close attention to any variations or typos in names, phone numbers, screen names or emails!
4. They don’t have a business license
Scam artists target investors with high net worths by offering them opportunities to invest in unregistered securities such as microcap stocks. Such stocks are vulnerable to manipulation and fraudsters can exploit this by spreading negative rumors about a company through social media, which causes its share price to plunge dramatically.
Fraudsters use various tactics to impersonate investment professionals and firms registered with regulatory bodies. Most commonly, these fraudsters create fake versions of public reports like FINRA BrokerCheck (for more information, read this OIEA Investor Alert).
They may also send messages directly or through compromised social media accounts to potential investors, so be wary of any new posts on your social media profiles, emails or communications that don’t originate with someone you know – especially if these come through social media! If investment information arrives via social media platforms such as this one, conduct an internet search using their name/firm name to see what results from that.
