You are successful. You are intelligent. But, still you may fall prey to investment recovery fraud. How is it even possible? Well, when it comes to fake investment recovery firms, there is nothing much difficult to fool customers from all walks of life – no matter how brainy they are.
Here are a few red flags that may help you to identify a possible investment recovery fraud.
For companies that want to spin money out of troubled investors, the key is simple – persuade them with false promises till they cave in. The first loophole here would be contacting you out of nowhere. If you receive a call from a self-proclaimed ‘leading’ investment recovery firm, then the most important thing is to figure out from where did it receive your number, or even know that you had losses. In many cases they stole the information that is supposed to be highly confidential.
Fees Up Front
According to the FINRA alert board, this is a definite red flag. Credible stock loss recovery firms and lawyers work on contingency, meaning if they don’t recover your losses, you pay nothing! This includes fees. if someone tells you ‘this is just for filing etc. and you’ll get it back, surely, when we win’ — run the other way!
Always remember to research the firm. There may be a disgruntled clients who say something negative about any firm, but if you see continual multiple negative complaints, you can check complain boards, like Rip Off Report, Scamalot, Complaint Board and Pissed Off Consumer, as well as industry magazine articles, like Investment News
You can also check blogs and BrokerCheck on FINRA. Research who the people are running the alleged stock loss recovery firm, company. Thy may be barred from FINRA, which is a tell-tale sign. Brokers that were sanctioned — or worse, barred from FINRA — for misleading the public or outright fraud, are likely applying those tactics to whatever new industry they’re engaged.
An article in the Wall Street in 2013 noted that 5,000 brokers were expelled from the industry due to bad acts.
Be vigilant. If credible law firms tell you have no cause of action in a case, then suddenly someone calls you from out of the blue with a lifeline saying they and recover your losses — for an upfront fee –, remember the old adage: if it’s seems to be too good to be true, it likely isn’t.