Hurricane, Flood and Wildfire Investors and Claims Recipients Ripe for Financial Fraud
The SEC Office of Investor Education And Advocacy is issuing an investor alert to protect you against investment loss and financial fraud related to the country’s numerous natural disasters. This alert includes any individuals who may receive a lump sum payout from insurance companies resulting in damage from the hurricanes, flooding or California wildflowers.
Be extremely leery before you invest, donate or are potential recipients of disaster payments.
Popular natural disaster scams may include:
● Promising high returns from unknown companies. Common scams may come in the form of small companies that provide “clean-up and recovery efforts”, or claim to have the latest and greatest natural-disaster related product or service. High returns come with high risks. Furthermore, the company might not even exist, and small companies can be hard to find any information on.
● “Pump and dump” schemes (selling large amounts of shares at artificially high prices that are then quickly dumped) often rise after a natural disaster strikes.
● Unsolicited investments circulated through email, social media, phone calls, message boards and the like. Social media is a great way to tug at heartstrings to promote false opportunities.
● Direct targeting of individuals in a disaster area. Scammers know who to target and why. Those hit the hardest are often too overwhelmed to practice due diligence.
● Watch out for companies who suggest they are associated, related or supported by any government agency such as the Federal Emergency Management Agency (FEMA).
Be especially diligent of anyone who offers to “inspect” your damages, provide restitution or offers low-interest loans to help you rebuild, even if the individual claims to work for your insurance company, local bank or the government. Ask for identification and check credentials before you provide any personal information.
If you’re interested in a particular disaster-related investment, be sure to do your homework first. Ask questions, review licensing and registration through the SEC or the relevant state. Check out the company through independent sources and verify information. Be extremely cautious if you’re approached about lump-sum payments.
If you believe you are a victim of financial fraud, or have been affected by an investment scheme, please contact our Securities Law Firm today. The Securities Attorneys at Peter C. Rageas are experienced in all types of securities litigation, investment fraud, broker negligence and more. We are located in Detroit and service clients throughout Michigan and beyond.
Please call us today at 313-334-7767 for a Free case evaluation!