Investment Scams During COVID-19

This is the 3rd in a series of articles posted curtesy of Sunrise MarketPlace and Marketplace at Birdcage to better educate our community on the increase in scams during the Covid-19 Pandemic. This series is meant to help you identify the different types of scams and not fall victim to any of them.

Investment scams become prevalent when ways to make money are limited. Since the coronavirus stopped many from working, there are more opportunities for people to be coerced into investing in a scam. While many government agencies are trying to keep the public aware of these frauds, they can be tough to spot. Common investment scams include:

  • Cashier’s check scams.

  • Charity scams.

  • Foreign wealth scams.

  • Inheritance scams.

  • Investment scams.

  • Loan scams.

  • Lottery scams.

  • Refund scams.

  • Work-from-home scams.

Often, the scammer will pose as a financial authority or a long-lost relative hoping to get the victim to invest money or give up financial details. The most notorious investment scam to date is known as the “Nigerian Prince” email scam. The scammer will pose as someone who knows your relative and who needs assistance getting their money to America. They will ask for bank account information and for you to send money to cover bank fees. These types of email scams still run rampant today, costing victims over $700,000 a year.

How to Spot While it’s typical for a pandemic to negatively affect investments, fraudsters can still use effective tactics to get people’s money. Luckily, there are some general methods you can use to spot an investment scam:

  • Verify the credentials of anyone asking for money.

  • Be skeptical of investment pitches that guarantee a certain return.

  • Do not believe that everyone is doing it.

  • Take your time considering the opportunity.

  • Do not feel obligated to invest.

Online scammers also try to take information from people, such as usernames and passwords. It is important to know how to protect yourself online to prevent these situations. If you find yourself in contact with a scammer, stop all contact and payments. Also be sure to contact your bank to initiate their fraud protection policies.

How to Report Reporting the scam may keep you and others from losing more money. For investment frauds, you must collect all relevant documents such as:

  • A contact sheet of the scammer’s name.

  • A timeline of events.

  • Recent credit reports.

  • Evidence of fraud.

  • Logs of phone conversations.

Then, you can contact one of the three agencies below:

  • The Financial Industry Regulatory Authority (FINRA)

  • U.S. Securities and Exchange Commission (SEC)

  • The North American Securities Administrators Association (NASAA)

We hope you are finding the current series regarding the different kinds of scams being perpetrated by less-than-honorable sources. The next article topic will be “Health Care Scams.”

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