Romance Scams Alert: Protect Against Investment Fraud

Are You An Informed Investor?

Don't Get Swept Away by a Romance Scam

Dating apps and social media platforms may be good ways to meet new people, but be cautious if someone turns a burgeoning online romance into an opportunity to solicit an investment or ask to borrow money. Scammers are increasingly posing as potential romantic partners to lure people into fraudulent investment schemes. This alert discusses some common tactics fraudsters use in investment-related romance scams and points out things you can do to protect yourself from these schemes.

ROMANCE SCAMS ROMANCE SCAMS ARE REAL; ON THE RISE KNOW THE WARNING SIGNS

Government agencies across North travel a lot for work, or have a Romance scammers set online traps America are seeing an increase in and use technology and social media job outside the country or area

investment-focused romance scams. platforms to profile targets. They also you live. They won't offer to visit In September 2021, the Federal spend time getting to know people you and may discourage you

Bureau of Investigation (FBI) issued before asking for money or introducing from trying to visit them. a warning that its Internet Crime an investment opportunity. Here are • Discussing wealth or business Complaint Center (IC3) had received some common tactics and warning success: In order to interest you signs to look out for:more than 1,800 complaints in investing, romance scammers related to online romance scams may brag about how successful • Reluctance to meet in-person or with losses of over $133.4 million. they are. They may flaunt their by video: Most scammers avoid In a similar report, the Federal meeting face-to-face because supposed wealth using photos Trade Commission (FTC) stated, "In oftentimes they aren't who they of luxury items, real estate, the past five years, people have say there are. They pretend to expensive cars, etc. They may reported losing a staggering $1.3 be anyone they think you would offer to help you make money or billion to romance scams, more be attracted to. They will make become wealthy, often offering than any other FTC fraud category." excuses not to meet, like being access to supposed inside

too busy with work, or not being Investments tied to cryptocurrencies information or trading secrets for able to get away from family or and digital assets topped the North trendy or complex investments,

community obligations. "In-American Securities Administrators like cryptocurrencies or non- Association's (NASAA) 2022 list of fungible tokens (NFTs). person" may include refusing a

video chat with the victim while investor threats. Some of these • Pressuring you to give them they groom them for the scam.threats may be tied to romance money: At some point, the scams. Finally, the Canadian romance scammer will likely ask • Wanting a long-distance Securities Administrators (CSA) you point blank to provide them relationship: Once you enter into recently warned of fraudsters using a "relationship" with an online with a sum of money. They will social media, messaging apps, and likely try to show you that your romance scammer, they might online dating sites to lure people tell you that they live far away, investment has grown quickly into investment scams. and substantially in order to hook

(over)Issued: May 2022

To learn more, contact the MS Secretary of State, Securities Division 125 S. Congress St., Jackson, MS 39201 | sos.ms.gov PHONE: (601) 359-1334 | FAX: (601) 359-9070

you into giving larger and larger amounts. If you show in. Check the SEC's Investment Adviser Public Disclosure database or FINRA's BrokerCheck to verify reluctance, they may put pressure on you by saying

manipulative things, such as that they are considering registered individuals or firms. In Canada, use the breaking off the relationship or they are offended that CSA's National Registration Search. you can't trust them. • Suggest meeting in-person or by a clear video

• Introducing an app or website: When you show a feed: To determine if a person is who they say they willingness to invest, a romance scammer may steer are, you can try and meet in-person in a public you to an investing app that they say they are using place. Make sure to meet in a safe, busy, and public or a website that offers investments. The website or place. Bring a friend or family member too - your wingmate doesn't need to stick around if things go app may be controlled by the scammer or a criminal

organization they are associated with. The scammer well, but it will give you a witness and an easy excuse may also offer to teach you how to invest or trade, to leave if you feel uncomfortable. and then ask for remote access to your computer or • Research websites and apps: Scammers create a request your online banking information. custom online platform and direct you to it in order

to take your money and hide from authorities. HOW TO PROTECT YOURSELF AGAINST

Building a custom app or website that can accept ROMANCE SCAMS

money or crypto assets is surprisingly easy. If a When we're smitten with someone, we tend to lead with person encourages you to invest and recommends an our hearts instead of our heads. A romance scammer investing website or app, make sure it is registered

depends on this, encouraging you not to look too deeply to do business in your state or province before into their background or the type of scheme they are investing. When dealing with registered investing

promoting. Protect yourself by following these steps: platforms, do business directly with the platform; don't allow someone to act as an intermediary. • Keep your guard up: If a new romantic interest

suddenly starts asking for money or encourages you to • Look for red flags: Scammers might attempt to make

start investing, be cautious. A potential partner should the investment look safe by convincing you that be focused on your developing relationship, not your they are investing and taking risks too. Alternatively, money or investing interests. they may say the investment is low risk or no risk while offering guarantees that your money will be • Run a background check: Do online searches to get safe. This is a red flag of investment fraud. Review a better idea of who the person you are dealing with

NASAA's Warning Signs of Fraud to better understand is and what they do. These days most people have common tactics fraudsters use to scam people. an online presence which includes personal and professional information. Fake online profiles tend to THE BOTTOM LINE

lack information about an individual, and the images Be careful when you meet new people online, especially used in an activity feed may feel impersonal or staged. when you are looking for romance. Seeking a romantic Scammers often use stolen images from real people or partner is a complex and emotional experience at the stock images, so it's good to do online image searches best of times - so it's a good idea not to mix business to check the origin and use of the image. with romance. Don't get swept away - make sure

• Check registration. Firms that provide investment you are in a relationship with a real person who cares advisory services in the U.S. are typically registered about you before even considering sharing financial with the U.S. Securities and Exchange Commission information, making an investment, or loaning a person (SEC) or one or more state securities regulators. In money. Also, reach out to the Securities Division of the Canada, firms and individuals must be registered with Mississippi Secretary of State's Office before making any the securities regulators in the provinces they operate investment or if you ever suspect fraud may be involved.

To learn more, contact the MS Secretary of State, Securities Division 125 S. Congress St., Jackson, MS 39201 | sos.ms.gov PHONE: (601) 359-1334 | FAX: (601) 359-9070