With the scams being increasing in the broker industry every day, impersonation scams are familiar scams existing for a very long time. Scams can be done in any way and in various new ways. A rapid increment in the trading scams has been encountered by FINRA in its report of February 2021. These scams are majorly done by creating fake identities and websites and pretending to be industry professionals
Imposter frauds are considered to be one of the oldest fraud techniques and a warning has been issued by the FBI and Securities and Exchange Commission to the traders to protect themselves from this kind of scam. However, one should always do deep research before trusting any kind of resource.
Here, Imposter websites mean when a fraudster uses the name and other important confidential information of a registered investor and pretends to be the original one. But, the picture here is not clear. They are the scammers who are using the professional’s information to create a fake website. They use this information to gain their customer base, their personal information, or login credentials. Such fraudsters can be identified if you are careful about spelling mistakes, poor grammar, and different kinds of phrasings, etc.
Along with the Imposter websites, imposter documents are the other type of scheme that involves the same fraud as imposter websites. Here, the fake FINRA BrokerCheck® report is created of the legit and registered broker and mailed to the clients. The name of the company and CRD number of a registered professional is mentioned in the report in order to scam you. This doctored report can be identified by tallying the CRD number, typing errors, fonts style, country code, etc.
Here are some of the points that will help you in preventing yourself from falling into this scam. Keeping these points in mind you can identify the potential scam:
Research – Before investing with any investor, search about the firm and its CRD number (also known as registration number). It is always advisable to not trust blindly, any information that is related to the company. You can gain information from the state registration databases. Researches can be proved very useful if done correctly.
Check out for inappropriate signs – Check out the report you obtained from your end or BrokerCheck and make a comparison with that particular report or document that you received from the firm or individual. You can identify the errors by checking the font styles, if they are matching with other parts of the report, typing errors, missing information, spelling mistakes, etc.
Avoid the transaction without verification – Do not ever transfer the funds without verifying the actual recipient. Also, avoid sharing any kind of personal or transactional information such as birth date, account number, passport details, etc. In case, the individual asks to share the personal information on their personal email address, check for relevancy and authenticity. Prevent yourself from transacting with a third party. You can also use BrokerCheck for verification purposes and once verified, transfer the funds to the financial firm.
Search Engine Verification – Take the advantage of any search engine and search about the firm soliciting your business and the firm name. Is the information is matching the one provided to you? If not, go deep into the research part by including a map search in the address. Check whether the number of the firm is mentioned in the CRS (Client Relationship Summary).
Observe the possibilities of Danger – Although you can trust your investment professionals, exceptions exist everywhere. Be aware of the unregistered products, missing information, aggressive salesperson, complex returns, etc. Anything you feel is inappropriate with the information, quickly go for the research and try to find the things based on your knowledge.
All these points mentioned above will help you in protecting your funds to the great extent. All you need to do is be careful while involving with these firms. Any sign of suspicion can prove risky and uncertain. Hence, it is always advisable for all investors to do detailed research before trusting and investing.
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