Some people see the aftermath of a Florida hurricane as an investment opportunity. Unfortunately, these people often are scam artists.

You have lost so much and must rebuild your life. You face financial and emotional chaos. You may be desperate. This makes you a potential target for fraud.

What to look out for

Investment scams are common after a hurricane or other natural disaster. Brokers may try to take advantage of you. They know you are anxious for any sign of hope. They entice you by:

  • Offering price targets or forecasting sudden, significant growth
  • Citing media accounts to predict their claims of an increase in stock prices (for example, telling you that a company will make a windfall from the rebuild)
  • Name-dropping contracts, government agencies and prominent companies
  • Hyping routine news, such as a company contract with a supplier, as a reason for investing
  • Stating how prices of low-priced stocks can jump as opposed to higher-priced stocks
  • Pressuring you to invest as soon as possible

What you can do

You can protect yourself from fraud even when your life seems to be in ruins following a hurricane. Some tips:

  • Do your own research. Anyone can make overblown claims about investment opportunities. Remember: They are salespeople.
  • Learn what you can about the investment company. It is possible a company is paying them to push a certain stock. Check the fine print for information that the company receives payments.
  • Find out where the stock trades. Companies trading on reputable exchanges must meet requirements that protect investors like yourself.
  • Conduct a background check. Read the company’s filings with the Securities and Exchange Commission. Verify what the broker is telling you.

What you can expect

Knowledge is power in any investment opportunity. Without it, you may make bad decisions. When you are vulnerable after a natural disaster, take all necessary precautions to protect yourself and your family from investment scams.