Fraudsters Feed on Fear & Market Volatility
During the past several months, COVID-19 and the economic fallout has dominated the news headlines. Turbulent times, financial market instability and policy changes are the types of fluctuating circumstances that bring out fraudsters en masse.
Simply put, con artists attempt to profit on investor fear and the unwary can get lured into phishing and investment scams.
As stimulus checks are being distributed, phishing emails and texts are being circulated, enticing consumers to click a hyperlink “to get stimulus money now.” Once the consumer clicks, the scammer gains access to computers and phones to steal sensitive information like Social Security and bank account numbers to commit identity theft and steal money.
Fraudsters know people are eager to receive stimulus money and may let their guard down. Imposters posing as government officials also used robocalls to steal federal stimulus dollars. Other get-rich-fast schemes circulating include work-from-home and sweepstakes scams.
Iowans should be on the lookout for scam artists trying to use the market downturn and the coronavirus to scare investors into so-called safer or guaranteed investments.
Anytime the financial markets go down, there is an uptick in several scams, including gold and precious metals, oil and gas drilling, promissory notes and private placement offerings.
When the financial market is volatile, it is understandable that some people are frightened and want to invest outside the stock market, especially when a salesperson is offering a safer and more profitable investment. But many of these offerings turn out to be Ponzi or other types of schemes.
Ponzi scams are at a 10-year high. When the market dropped during the Great Recession, massive and longstanding Ponzi scams, such as the Bernie Madoff scheme, were uncovered. Unfortunately, that may be the case again.
Remember to never make an investment decision without understanding what you are investing in, who you are doing business with, where your money is going, how it will be used and how you can get it back.
Always ask if the salesperson and the security are registered in Iowa. And make sure you call the Iowa Insurance Division to double-check that the agent is in fact licensed and the security is in fact registered.
