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Investment Scams: Investors Beware of Government Impersonators

Investors need to beware of a type of scam that involves impersonators of government officials.

Modus Operandi:

The scammers' modus operandi involves calling, emailing or mailing investors, using the name of real government employees (usually employees of the Securities and Exchange Commission) to solicit personal and financial information from these investors. Examples of information usually solicited include:

information on their shares and brokerage accounts
account personal identification number (PIN)
banking information
other information that may be used in identity theft

Justification

Scammers justify their request for highly sensitive information by telling an investor (their target or prospective victim) that they (scammers) need such information so they can:

transfer funds to the investor's account
ensure the investor's eligibility for a particular government grant
inform the investor about securities he (doesn't know) he owns
inform the investor about a lucrative investment offer or deal
inform the investor about certain disbursements to which he is entitled

What Happens Next

In short, these government employee posers tantalize their target investors with the prospect of earning a lot of money. Those who bite the bait are then asked to send money to the scammers' account if they want to take advantage of the opportunity being offered or if they want the transaction to go through.

In some cases, the scammers do not just request money from their victims. They also use the personal information they have already collected to perpetrate identity theft.

Protecting Yourself

Protect yourself from these scammers by remembering the following tips:

The SEC is a government agency and does not offer or recommend investment deals, process fund transfers on your behalf and do other things that only bonafide service providers do. Thus, no SEC employee should contact you with regards to these matters.
SEC employees and government employees do not solicit investors' PIN, passwords and highly sensitive information.
Government agencies' websites and email addresses use top-level domains like .gov, .mil and fed.us. If you receive a supposedly official email from someone claiming to be a government employee, the website or email address used to send that communication should have one of these top-level domains. Otherwise, chances are high that the email is fraudulent.
Whenever an email soliciting personal information has a clickable link, copy-paste that link to your search bar (not your URL bar) to search out fraud alerts and warnings. If you want, you may also test it by copy-pasting it to your URL bar. While it is loading, check the bottom-left side of your status bar (where the status message appears) to see if the address in the URL bar matches the actual domain of the site that's loading. Sometimes, scammers provide URL addresses that seem legitimate but would redirect you to a spoof site when used.
Whenever someone contacts you and tells you he or she is a government or SEC employee, be sure to check his or her credentials. Check if such a person does exist. If a person of that name does exist in the government or SEC payroll, be sure to contact that person directly to verify the communication you received. Finally, if the person who contacted you is indeed an impersonator, be sure to file a complaint with the SEC or the government agency concerned.

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