Investment

SCC Cautions Virginia Investors Regarding Online Investment Scams

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RICHMOND — The State Corporation Commission (SCC), a state agency with regulatory authority over many business and economic interests in Virginia, warns residents to be wary of online investment scams tied to social media and the Internet.

While acknowledging that the internet, social media and messaging apps offer useful features for daily life, the agency cautions that individuals trying to promote investment scams may pose as potential romantic partners or possible new friends in an attempt to lure 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 make it easy for scammers to pretend to be someone who they are not. Whether online, by phone or in person, be leery of unsolicited investment offers and never share financial information with a stranger. Understand the risks and benefits of any investment and do not invest more than you can afford to lose.”

Scammers may set online traps or use technology and social media platforms to profile targets, and the SCC’s Division of Securities and Retail Franchising encourages Virginians to be skeptical of investments offered by new or unfamiliar online contacts or friend requests.

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

  1. Independently verify who is offering an investment and the details of an offer, as well as verify any app or website to which a stranger may direct you. Be wary of individuals who are unwilling to meet face-to-face or via clear video feed, or who attempt to pressure you into making an investment.Keep in mind that individuals offering investments are obligated to disclose all material facts regarding an investment, and they must disclose the risks associated with each product. Bad actors will often minimize or conceal risks of an investment and, instead, tout their alleged profits and payouts.
  2. Make sure any investment and the person offering it are properly registered. In Virginia, contact the Division at 804-371-9051 or toll-free at 1-800-552-7945, or email SRF_General@scc.virginia.gov. Investors can also search the federal Securities and Exchange Commission’s Investment Adviser Public Disclosure website or visit the BrokerCheck platform offered by the Financial Industry Regulatory Authority (FINRA).
  3. If an offer sounds too good to be true, it probably is. Don’t be swayed by flattery or the promise of friendship or romance, or be enticed by claims of safe, lucrative or guaranteed returns with little or no risk. These representations 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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