The essentials
- Legitimate firms do not cold-call with guaranteed returns or pressure you to act today.
- Check the firm's registration and use only contact details from the regulator's register.
- Anyone charging an upfront fee to recover lost money is almost certainly running a second scam.
Clone firms
Fraudsters copy the name, address and registration number of a genuine authorised firm, then give you their own phone number, email and website. Because the details check out on a quick search, victims feel reassured. The test is to contact the firm using only the details shown on the regulator's register.
Boiler rooms
High-pressure sales calls offer shares in small, often overseas companies, pre-IPO opportunities or "discounted" bonds. The shares are frequently worthless or never delivered.
Pump and dump
Promoters buy a thinly traded share, then hype it on social media or in chat groups. When others pile in and the price rises, the promoters sell. The price collapses, leaving late buyers with losses.
Investment club and fake app scams
You are invited into a messaging group led by a "professor" or "mentor" who shares winning stock tips. Eventually you are asked to invest through a special app or institutional account. The app shows profits, but withdrawals are blocked or require extra fees.
Recovery fraud
After a loss, victims are approached by people claiming to be lawyers, regulators or investigators who can recover funds for a fee. Real authorities do not charge victims.
Warning signs
- Unsolicited contact about an investment
- Guaranteed or unusually high returns
- Pressure, deadlines, or requests to keep it secret
- Payment to personal accounts or in crypto
- A platform or app you cannot find on a regulator's register
- Fees to withdraw your own money
What to do
- Stop and do not send more money.
- Contact your bank immediately.
- Report the scam to your regulator and the police.
- Warn others who may have been approached.
AtlanticQuote never contacts readers about investments. See how to choose a broker for the checks to run on any firm.
Reader questions
How can I check whether an investment firm is legitimate?
Search the regulator's register directly, check warning lists, and contact the firm only through details listed by the regulator.
Are stock tips in social media groups legal?
Sharing opinions is generally legal, but coordinated promotion to profit from others' buying can be market manipulation. Treat anonymous tips with great caution.
Sources
- U.S. Securities and Exchange Commission, Investor.gov alerts
- UK Financial Conduct Authority, ScamSmart