The Dow Jones Industrial Average has gained more than 1,000 points since early February, and the increase has resulted in a surge of hot stock and investment scams.
Investment scams target consumers hoping to ‘catch the wave’ and make quick money through the stock market, real estate, start up companies, and more. The Pepper Rock Resources Corp. scam shown below is a classic example. In this unsolicited email (which should be enough to tell you this is a scam), you’ll find no links to distrust – in fact you have to take some ‘initiative’ to follow up on this so-called hot tip. Failing to make a detailed examination of both the ‘sellers’ and the product/stock/land, will part you from your hard earned cash.
Recommendations from friends and family must be treated with as much caution as those coming from unknown sources. Just because the email says it’s from someone you know, doesn’t mean it actually is; their account may have been hijacked and used by scammers. Or, they may have been fooled into investing and are innocently recommending the scam.
Before investing any money in anything, always call or check online with your state’s Department of Financial Institutions, or with the federal Financial Industry Regulatory Authority (FINRA) to see if the investment is legitimate.
Test Your Skills
You should be able to find at least six red flags that tell you this e-mail is fraudulent. Scroll down to the picture below to see the answers, but try to find them yourself, first. If you find four, you’re a pro with little to worry about. If you find fewer than four, consider practicing on some more of our spam scam examples.
Here are the clues that this is a scam:
Before you even read the email, the mere fact that it comes to you unsolicited screams “this is a scam”.
- The sender’s email alias is a dead giveaway – you don’t know Adam, and you don’t want to take a recommendation from “Rena” using “Adam’s” account. The subject line is entirely unprofessional. The sender obviously doesn’t know who you are – it’s addressed to renovi@gmail.
- The email body starts off referring to “Our” as if you should know them. And it uses exclamation marks. When’s the last time your financial institution used exclamation marks in a communication?
- The email is rampant with misspellings. prrice tarrget anyone?
- The promise of huge returns, is always a red flag. They are claiming the stock is expected to triple in the ‘shorrt terrm’ and increase 25 times over in the ‘long terrm’.
- The email conveys urgency. “When these companies move, they take off”. It also tells you to search the company using any search engine. This is a clever move as many consumers have learned to be leery of links in email. By setting up some great looking pages, any scammer can look legit on the surface, and they’re hoping that you won’t dig deeper.
And if you read their own press reports, they’ll seem like a solid company.
However, if you type Pepper Rock Resources and the word ‘scam‘ into your browser and you’ll find a different, far more seedier, picture emerges.
Warning: Don’t be mislead by The McAfee trusted symbols. These only indicate that a site isn’t known to contain malware or download spam, it does not provide a guarantee of legitimacy or rate the ethical behavior of the site.
- The email’s parting shot is another push of urgency, dangling the prospect of exciting news and hoping you’ll rush to get in before you’ve thought the whole thing through and done your research.
The smartest investment you can make is investing the time needed to be sure you aren’t being scammed.