Where do fraudsters target investors online?

| Oct 27, 2020 | Investment Fraud

As an investor, you probably use the internet as a tool. While you may make some worthwhile connections, you also need to keep in mind that there are fraudsters who also utilize the internet.

According to the U.S. Securities and Exchange Commission, there are several places a fraudster might target investors.

Spam emails

If you use email regularly then odds are you have had spam emails in your inbox. A fraudster will send mass emails to hundreds of thousands of people. To stay safe regarding spam emails, remember that if a deal sounds too good to be true, it probably is. Likewise, even if the email has your name or other pieces of personal information, it is normally only public data. The fraudster can use software to send personalized emails to many people at once.

Forums and social media

Fraudsters may also use social media sites or forums, to lure in investors. They can hype a group of investors up about a company and use the discussions to sell their scams. For instance, they may pretend that they are leaking information or talk up a company. The problem with many of these forums is that you cannot verify who you are speaking to. A person who says he or she is completely unbiased may be on the company’s payroll.

Credible websites and newsletters

A fraudulent promoter is self-serving. He or she may pay for a spot in an online newsletter and claim unbiased stock recommendations. These stocks may be completely worthless, or the promoter may misrepresent the stocks. Fraudulent promoters lure investors in by promoting the stocks on legitimate websites.