The Tennessee Department of Commerce & Insurance’s (TDCI) Securities Division is alerting Tennessee consumers to the increasing prevalence of “imposter scams” and providing guidance on how to protect themselves from these fraudulent activities.
An imposter scam, also known as “spoofing,” involves a scammer pretending to be someone else to deceive a victim into giving away personal information or money. Although impersonation is an old tactic, modern scammers are using publicly available data and advanced technology to disguise their true intentions.
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“In the hands of a scammer, a public database of legitimate brokers and investment advisers can be used to earn consumers’ trust in order to steal their money or personal information,” said TDCI Commissioner Carter Lawrence. “By learning the red flags of these schemes, asking questions, and conducting research, Tennessee consumers can avoid falling victim to their schemes.”
A typical imposter scam may involve a cold call where the scammer claims to be a trusted individual to persuade the victim to invest in a non-existent opportunity. More sophisticated scams can utilize fake email addresses, websites, and documents to create a false sense of legitimacy.
A recent blog post details how an imposter scam operates.
“Tennessee investors know that TDCI’s Securities team is here to answer any questions that Tennesseans may have about the legitimacy of a purported securities professional,” said TDCI Assistant Commissioner for Securities Elizabeth Bowling. “We can provide information about whether an investment professional is registered to buy or sell securities or offer investment advice, and whether the professional has any regulatory actions or other disciplinary events in their past. I urge investors to contact us with their questions before making an investment.”
In Tennessee, penalties for spoofing increased in 2017 with the revision of the Anti-Phishing Act of 2006. It is now a Class A misdemeanor to send misleading caller ID information with the intent to defraud, harm, or steal. The Tennessee Attorney General can seek a court order and recover a penalty of up to $10,000 per violation.
To protect yourself from imposter scams, consider these tips:
– Check legitimate registration sources and contact TDCI’s Securities Division to ensure you’re investing with someone authorized to engage in the activity.
– Look for typos, misspellings, and factual discrepancies in any investment solicitation.
– Avoid answering calls from your own number on Caller ID. Do not call the number back or press any buttons if prompted. If you answer, never give out personal or financial information.
– Use contact information from BrokerCheck and IARD to verify the identity of anyone soliciting personal information or investment funds. Ensure they are legitimate securities professionals.
– Remember: If something seems too good to be true, it probably is.
For investment-related questions, contact TDCI’s Securities Division online or call 800-863-9117 for more information.
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