The Federal Trade Commission and Consumer Financial Protection Bureau have both cited an increase in investment scams in the year 2020. Both agencies have websites dedicated to harvesting reports from scam victims and offer resources on how to protect yourself. The rise in scams relating to investments follows a similar trend: the number of victims and the amount of money they lose rose. As a result, investors should exercise a high degree of scrutiny when considering new investments and gathering information before making a decision.
While the SEC has warned investors to be wary of these scams, the number of reports filed has jumped significantly in 2020. The SEC has been monitoring the growth of investment frauds and has taken steps to protect investors. Scammers take advantage of the chaos created by Covid to attract new victims. The SEC has not yet responded to a request for comment on the issue. However, there are a few indicators that investors should be aware of.
Scammers use various tactics to entice investors. Some of these investment schemes are based on a new technology, and may be accompanied by high-pressure tactics. They may also make claims that the investment offers a cure for a virus or other health problem. Ultimately, these investments aren’t as lucrative as they seem. Instead, the scammers exploit the news or events that impact the markets to lure potential investors.