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Fighting Investment Fraud: Investor Awareness

May 11, 2020

It’s no secret that fraudsters are looking to take advantage of the COVID-19 pandemic any way that they can. To assist in protecting investors from COVID-19 investment scams, the Washington Department of Financial Institutions (DFI) is encouraging public reporting of suspected fraudulent COVID-19 investment offers. Investors who see or suspect they fell victim to COVID-19 related investment scams can contact the agency toll-free at 877-RING-DFI (746-4334), locally at 360-902-8730, or via email at securities@dfi.wa.gov.

A critical component of fighting fraud is investor awareness. To help investors identify common telltale signs of possible investment fraud, the DFI suggests three questions to ask before making a new investment:

  1. Is the investment being offered with a guaranteed high return with little or no risk? All investments carry risk that you may potentially lose some or all of your money. Anyone who says their investment offer has no risk is lying. No one can guarantee an investment return.
  2. Is there a sense of urgency or limited availability of detailed information surrounding the investment? If someone offers you a “can’t miss” investment opportunity and pressures you to invest right now, don’t be afraid to walk away.
  3. Is the person offering the investment, and the investment itself, properly licensed or registered? For the same reasons you wouldn’t go to an unlicensed doctor or dentist, you should avoid unregistered investment salespeople and their products.

The DFI is participating in an international enforcement task force organized by the North American Securities Administrators Association (NASAA) to investigate fraudsters looking to capitalize on the COVID-19 pandemic. Join the fight against financial fraud by contacting the DFI if you see or suspect an investment scam.