Saturday, June 25 2022
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RICHMOND — The State Corporation Commission (SCC), a state agency with regulatory authority over many business and economic interests in Virginia, is warning residents to beware of online investment scams related to social media and Internet.

While acknowledging that the internet, social media and messaging apps provide useful features for everyday life, the agency warns that people trying to promote investment scams may pose as partners potential romantics or potential new friends for the purpose of luring unsuspecting individuals into fraudulent investment schemes.

“Don’t let your heart rule your head when making financial decisions,” said director Ron Thomas. “The virtual world can allow scammers to pretend to be someone they are not. Whether online, over the phone or in person, beware of unsolicited investment offers and never share any Financial Information with a Stranger Understand the risks and rewards of any investment and don’t invest more than you can afford to lose.

Scam artists can set up online traps or use technology and social media platforms to profile their targets, and the SCC’s Securities and Retail Franchise Division encourages Virginians to beware of investments offered by new or unknown online contacts or friend requests.

The agency reminds residents to do their homework before considering any investment, and Thomas offers the following advice:

  1. Independently check who is offering an investment and the details of an offer, as well as any apps or websites a stranger may be directing you to. Beware of people who don’t want to meet in person or via a clear video stream, or who try to pressure you into investing. Keep in mind that people offering investments are required to disclose all material facts about an investment, and they must disclose the risks associated with each product. Bad actors will often downplay or conceal the risks of an investment and instead tout their alleged benefits and payouts.
  2. Make sure that any investment and the person offering it is properly recorded. In Virginia, contact the Division at 804-371-9051 or toll-free at 1-800-552-7945, or email [email protected] Investors may also search the Federal Securities and Exchange Commission Investment Advisor Public Disclosure website or visit BrokerCheck platform offered by the Financial Industry Regulatory Authority (FINRA).
  3. If an offer sounds too good to be true, it probably is. Do not be swayed by flattery or the promise of friendship or romance, or be lured by claims of safe, lucrative, or guaranteed returns with little or no risk. These depictions are often a red flag for fraud, since all investments carry some degree of risk.

For more information, residents are encouraged to visit the Division’s website at scc.virginia.gov/pages/Consumer-Investments or the NASAA website at nasaa.org.

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