For someone who has already been a victim of instock loss due to broker misconduct, losing money again in a stock loss recovery scam can be agonizing. To help you recognize a potential stock loss recovery scam, here are some must simple tips.
- You have been contacted unexpectedly
One of the most common warning signs of a probable stock loss recovery scam is that you receive an unsolicited phone call. They seem to know a lot about your situation. They listen to your answers to initial questions and are overwhelmed at how good a case you have. When people approach you unsolicited this is one of the warning signs listed in the FINRA alerts.
- There is an upfront fee to be paid
Legitimate stock loss recovery firms work on contingency. This means if they don’t recover an award for you, they earn nothing. Less reputable firms ask for an upfront fee as written about in Moneywise. They’ll tell you it is to cover filing and other incidental fees — and you’ll get it back from the award anyway, they’ll say. This pissed off consumer fell into that trap and lost an additional $6,000.
In another case represented by Cold Spring Advisory Group, the claimant they represented requests $29,000 in losses and $3,500 is “case preparation” fees. While we don’t know for sure that those case prep fees were paid up front by the client, there does seem to be a pattern for this company asking for upfront fees. And there are many complaints against them.
The Internet is swamped with complaints against this company, on PissedOffConsumer, RipOffReport, Complaint Board, and ScamaLot, among many others. Reporter Brie Austin has been researching and writing about, as well has Bill Singer of brokenbroker.com, And according to Brie Austin, Louis Ottimo is the company’s shadow president. Stay clear of these guys: court document research shows that despite their claims to the contrary, they’ve lost a lot of cases that we’ve found, some by sheer incompetence, others dues to meritless cases.
- All that you can find is self-promotion
When you research an investment recovery firm, you should be able to find independent and credible information about them. With the power that the Internet provides however, it has become easier for companies to create a false narrative. When you see a glowing article about a firm, and if it is on a credible magazine or newspaper website, check to see if it is an original article or just a redisplay of a press release.
Press releases are written by the company that the release is about, so that is not credible. For example if you read this article or this about Cold Spring Advisory it gives the impression that this a a good firm. IT’S NOT! It was written by them and they paid to have it syndicated and redisplayed on those pages. So you need to be diligent in your research.
These were just three examples of scam behavior to watch for. Scammers are adaptable, and they are continually evolving and changing their approach to get into your pocket. Stay alert and do your homework.