Beware of con artists looking to profit from fear and uncertainty
In light of ongoing developments related to the current coronavirus situation and its impact on financial markets, the Delaware Department of Justice’s Consumer and Investor Protection Units are reminding consumers and investors in Delaware to beware of con artists seeking to capitalize on fear and uncertainty.
“Con artists see opportunity in people’s anxieties,” said Attorney General Kathy Jennings. “The ugly truth is that scammers will use current events to cloak their schemes with an air of legitimacy and urgency. It’s important that consumers and investors stay vigilant to protect themselves - both from disease and from those seeking to profit off of it.”
Coronavirus-related scams may include fake consumer products or misleading emails, text messages or social media posts intended to facilitate the theft of money or personal identifying information. Emails and social media posts may promote coronavirus prevention along with false information about cases of the virus in Delaware communities. Such posts or emails may ask for donations to victims, contain malicious attachments or provide false or misleading information about unproven treatments.
The Federal Trade Commission has offered a number of tips to help consumers avoid becoming a victim of coronavirus-related scams:
• Don’t click on links from sources you do not know;
• Ignore online offers for vaccinations;
• Be suspicious of emails falsely claiming to be from the Center for Disease Control and Prevention (CDC) or experts claiming to know about the virus;
• Do your homework before donating through charities or crowdfunding sites, and do not let anyone pressure you into giving, especially in the form of cash, gift card, or wire.
• Do not provide personal information in response to texts or emails asking for it.
The Delaware Department of Justice also warns of the potential for coronavirus-related investment scams. Investors are reminded:
Do not make investment decisions without understanding what one is investing in, who one is doing business with, where the money is going, how it will be used, and how to get it back;
Use the Financial Industry Regulatory Authority’s BrokerCheck tool to research one’s broker or investment advisor and determine whether they are registered with the IPU;
Be on the lookout for scam artists trying to use the market downturn and the coronavirus to scare investors into so-called “safer, guaranteed” investments.
To help investors identify common telltale signs of possible investment fraud, the Delaware Department of Justice has provided three questions to ask before making a new investment.
Is the investment being offered with a guaranteed high return with little or no risk? All investments carry risk that one may potentially lose some or all of the money. No one can guarantee an investment return.
Is there a sense of urgency or limited availability surrounding the investment? If the offer is legitimate, it will be there later. If someone offers a “can’t miss” investment opportunity and puts one on the spot, don’t be afraid to walk away.
Is the person offering the investment, and the investment itself, properly licensed or registered?
Jennings encourages Delaware residents to contact Consumer Protection Unit at 302-577-8600 to report suspected coronavirus-related consumer scams, and the Investor Protection Unit at 302-577-8424 with any questions about the investment professional they are working with or investment products being offered.
