The Securities and Exchange Commission (SEC) recently charged a man with trying to sell $500 billion worth of fake securities on the online social network LinkedIn. It’s a reminder that crime goes where the people go, and the people are on social media websites like LinkedIn and Facebook.
With this advice from USA.gov and the SEC you can stay safe from online investment fraud.
* On the Internet, it’s easy for criminals to make attractive websites that make scams look real. Always use caution when considering an investment you found online.
* Be suspicious of unsolicited offers. If you didn’t ask for it, and you don’t know the source, there’s a good chance of bad intentions.
* The old rule about too good to be true still stands, even in new media. Compare the promised returns with the returns on well-known stock indexes. Guaranteed returns and pressure to buy right now could be signs of a scam.
* Tighten your privacy settings. Fraudsters can use your private information to make you think you know them: “Don’t you remember me from college?”
* Is a financial service provider trying to Friend you? Feel free to say no. Friending someone can mean you let them see everything about you.
* When you’re on social media, never communicate your bank account or Social Security numbers. Always use more trusted forms of communication with brokers and advisers, like the telephone, letters, or the firm’s official email or website.
* Be careful about clicking on links by making sure they go to a legitimate source. It’s easy for fraudsters to create a good-looking fake email, hoping you’ll click a link and feed private information into it or unknowingly put malicious software onto your computer. If an email seems to be from a trusted source but the content and spelling mistakes seem out of character, skip the links in the email and go to the website directly yourself.
* Affinity fraud is what the SEC calls it when the fraudster preys on what you have in common, like ethnicity or religion. Even if you know the person forwarding you a message about an investment opportunity, check out everything. They might have been fooled first.
* Another trick is manipulating the market with “Pump and Dump.” They’ll say they have “inside information” and talk up a stock that doesn’t deserve it, then sell after everyone buys and the price is high.