A Few Tell-Tale Signs of a Stock Loss Recovery Scam

Falling into the traps of stock recovery scammers is easy. They pretty much know what troubled investors want to ‘hear’ and what they ‘hope for’. So they make all the right promises with the intent of getting your upfront money. They’ll usually have great press to show you, although in most cases they’re press releases, or articles on third party site that they themselves wrote, or had written for them. Their goal is to impress you with their prowess in recovering lost investments, and might even claim to be the biggest or best in the country.

While stock loss due to fraud is real, so is stock loss recovery. So beware and get educated. FINRA, the regulatory body that oversees the securities industry, posts alerts on their website to help potential victims sidestep scams. So read these alerts.

Here are some of the red flags that should warn you you’re being set up.

Unexpected Pitching

The first sign of an approaching fraud could be unexpected calls from an investment recovery firm. While you may be happy, excited even, to hear the promises made by such a firm, first understand that investors’ information is confidential. So you need to see through the fog and wonder “how did they get my contact info, and how do they know about my portfolio? How did they know I potentially had stock losses?  In most cases they would have gotten your contact information illegally: either they stole it, or had someone inside the company where you placed your trades slip it to them.

A complaint on Scamalot clearly mentions this. The complainant reported that Cold Spring Advisory purchases confidential client information from numerous stock brokerage firms — through connections with “lead brokers”. This particular complaint also raised questions about Louis Ottimo, Anthony Ottimo and other such members or masked affiliations of this company. Moreover, National Securities filed suit against them for such actions. So, if you receive an out of the blue call from this company, its members or people affiliated with them, or from any other firm, beware – you could be dealing with a sham stock loss recovery firm.

Demand for an Upfront Fee

FINRA lists this as a red signal. Firms that demand an upfront fee for recovering your investment losses are highly likely looking for ways to get on a gravy train.  They may tell you it’s for “filing fees, not for them,” but legit recovery companies don’t do that, they work solely on contingency, meaning they incur all the costs and only recoup fees and a percentage of damages received if they win your case. Before you hand over your hard-earned money to any random investment recovery firm, stop and research them. And if there is lots of great press about them, diligently research the source — often it’s a press release them themselves wrote, and or is on a contributor site that they — or someone on their behalf — posted.

Losing money in the stock market is bad enough, don’t compound it by being scammed for more.

 

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