The North American Securities Administrators Associations has released an imminent warning to investors who are looking for online investments. In a new wave of cyber-crime, online-crooks are using social network and social dating sites as a means to promote their bogus investments. In 2010, consumer complaints relating to online fraud in America increased by 12% compared to the previous corresponding period.
How it starts
The warning goes on to identify leading social and dating sites such as LinkedIn, Facebook, Twitter and dating site eHarmony as prime locations for online scammers to promote their online investment scams.
Skilled cyber-criminals basically connect with established online groups and individuals thus making full use of the nature and functionality provided by these social sites as a way to pitch their fake money making venture. By joining various groups on Facebook, for example, it’s easy for con artists to gain access to a wide variety of personal information and to build a certain level of trust via their “online friends” and the information posted and shared throughout friend networks and groups.
Identifying These Scams
Much like the approach used in offline scams, con artists promise their investors high returns with virtually no risk of losing their money. Red flags to watch out for include guarantees of daily, weekly or monthly dividend pay-outs. The North American Securities Administrators Association warns investors not to participate in off-shore operations simply because it’s difficult for local authorities and regulators to shut down or indeed recover lost funds.
These online frauds often provide prospective investors with a layer of so called proof that their scheme is legitimate by providing bonus pay-outs to initial investors then fleecing those who follow. Websites that provide no physical address or offer little history pertaining to the company’s management should be avoided at all times. Scam investments don’t usually offer prospective investors risk advice and warnings or a prospectus.
How to stay safe
First of all, prevention is often easier than the cure. So be vigilant about who joins your groups, and which groups you join. Set your privacy settings accordingly so the groups you do join do not post your private or sensitive information. If you’re looking for peace of mind as to the legitimacy of the investment, apply due diligence and common sense. Search the backgrounds of those connected to the investment. You can also make inquiries with the high commission within the country said to be offering the investment. If there are no matching records and at least several years of bona fide trading history, then forget it.
If you feel as though you’ve been the target of an online scam via a social network or dating site, contact your local securities commission.
About the author: This news story was presented by Matt Fuller. Matt writes about many different subjects that relate to social networking, free dating sites advice, social media news and free dating sites reviews for single people.
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