Beware those looking to profit from COVID-19
In light of the ongoing developments related to the current COVID-19 situation and its impact on financial markets, the Wisconsin Department of Financial Institutions (DFI), reminds Wisconsin investors to be wary of con artists seeking to capitalize on fear and uncertainty.
“We know con artists are opportunistic, and use current events to cloak their schemes with an air of immediacy and legitimacy,” said DFI secretary Kathy Blumenfeld. “Never make an investment decision without understanding exactly what you are investing in, who you are doing business with, where your money is going, how it will be used and how you can get it back.”
Always ask if the salesperson, and the security are registered with the state or provincial securities regulator. Blumenfeld also said investors should be on the lookout for scam artists trying to use the market downturn and the coronavirus to scare investors, into so-called “safer” or “guaranteed” investments.
“If you have concerns about your retirement accounts or investments, talk to your financial professional,” said Blumenfeld. “Avoid making decisions based on panic or fear.” To help investors identify common telltale signs of possible investment fraud, the DFI provides three questions to ask before making a new investment.
First, is the investment offered with a guaranteed high return, with little or no risk? All investments carry the risk to potentially lose some, or even all, the money. Anyone who says their investment offer has no risk is lying. No one can guarantee an investment return.
Second, is there a sense of urgency or limited availability surrounding the investment? If the offer is legitimate, it will be there later. If someone offers a “can’t miss” investment opportunity and puts a person on the spot, don’t be afraid to walk away.
Third, is the person offering the investment and the investment itself, properly licensed or registered? For the same reasons someone wouldn’t go to an unlicensed doctor or dentist, they should avoid unregistered investment salespeople and their products.
“Make sure you have all the facts before you hand your money over to someone else to invest,” said Blumenfeld.
