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(Columbus) – As investment opportunities become increasingly complex and sophisticated, the risk of Ohioans falling victim to financial scams has never been greater. In recognition of Older Americans Month, which is a group often targeted by fraudsters, and to help all consumers better defend against these threats, the Ohio Department of Commerce’s Division of Securities is highlighting the increased prevalence of investor scams and providing guidance on how individuals can safeguard their finances.
In 2023, the Division received approximately 250 complaints of fraud from consumers, which marked an increase from previous years. According to the Federal Trade Commission, Ohioans lost more than $150 million last year to a variety of financial scams.
According to the FBI’s recent Elder Fraud Report, in 2023, its Internet Crime Complaint Center (IC3) received over 880,000 complaints with potential losses exceeding $12.5 billion. That same year, total losses reported to the IC3 by those over the age of 60 topped $3.4 billion, an 11% increase in reported losses from 2022. There was also a 14% increase in complaints filed with IC3 by elderly victims.
Following the growth in popularity of digital platforms, the landscape of investment scams has undergone significant changes, with a dramatic uptick in “financial grooming,” or romance scams, cryptocurrency schemes, precious metals fraud, and deceptive real estate investment proposals.
“Investigate before you invest,” said Timothy Jones, Investigator Supervisor with the Ohio Division of Securities. “We want to ensure that all Ohioans have the tools and knowledge to protect their finances from unscrupulous actors. By being aware of common scams and taking proactive steps to verify the credibility of investment opportunities, individuals can significantly reduce their risk of falling victim to fraud.”
Red Flags and Protective Measures
Investors should be wary of unsolicited communications such as through social media platforms, overly complicated investment opportunities, and offers that seem too good to be true. Affinity fraud, which utilizes pre-existing relationships to exploit trust, has also been identified as a common method used by scammers.
To protect themselves, consumers should take the following steps:
· Request comprehensive information about the investment and conduct thorough research on the company or platform.
· Validate website legitimacy through third-party sources such as ICANN to verify the age of the domain against the company’s claims.
· Approach investments involving cryptocurrencies, precious metals, and FOREX with heightened caution, conducting research and validation of the companies involved.
· Investigate the track record of any real estate investment opportunities, particularly those promising returns as a result of property flipping.
· Utilize resources like FINRA’s BrokerCheck to verify the licensure and history of financial advisors.
Immediate Actions for Victims
If someone believes they are a victim of an investment scam, they should:
· Report the incident to local law enforcement, the Ohio Division of Securities, and the FBI’s Internet Crime Complaint Center (IC3).
· Notify credit reporting bureaus and financial institutions if personal information was disclosed.
· Update all relevant passwords to prevent further unauthorized access.
Ensuring Legitimacy Before Investing
Before committing to any investment, Ohioans are encouraged to:
· Contact the Ohio Division of Securities for licensure verification.
· Request prospectuses, statements of investment performance, and full disclosure information.
· Seek clarification on investment products.
· Ask plenty of questions.
For additional information or to report suspicious investment activity, please contact the Ohio Division of Securities directly at (614) 644-7381 or by clicking here.
