Social Media Shenanigans: Fraud or Financial Windfall?
The Internet is an excellent format for unscrupulous opportunists who are looking for their next victim and no one wants to be that person. The explosion of social media has given many of these bad actors a lucrative opportunity for fraud because of the sheer number of people on the Internet and the popularity of many social mediums. Here are five tips to remember for your financial protection when dealing with social media outlets.
1. Deal With Reputable Sources
Websites and services appear to be authentic and trustworthy, but there are a few red flags that any investor should recognize. The wide availability of broadband has enhanced the capabilities of scam operators and they are becoming more sophisticated by the week. Many investors, however, already have successful working relationships from before contemporary communication technology became available, and these sustained relationships are usually valid services offering sound advice.
2. Practice Healthy Skepticism
The first thing to remember is always be skeptical of any financial offering over the Internet without vetting the sales agency. General warnings from investment fraud lawyers always includes the adage that, if an unsolicited offer appears too good to be true, rest assured it probably is. Financial relationships with companies that have a successful and responsible track record can be considered safe in most cases, but always make sure that the online entity is actually who they claim. Websites can easily be designed similarly and have a valid look and feel. Know who you are dealing with. This is especially true of advertisements seen on the various forms of social media or the ever-popular email newsletter sales drives that begin as advisement services.
3. Avoid the Hard Sell
Sales hooks are always designed to leave the victim vulnerable to theft and deception with little or no recourse. Limited time offers are designed that way purposefully. Plus, margins and yields can often be exaggerated in the sales pitch. The technical term for this process is “sales conditioning.” Even with legitimate offers, the broker is attempting to generate a service fee at a minimum and this is usually based on a purchase. Investment brokers should also issue advice on what to sell as well as buy, but most only earn commissions when the investor buys a security.
4. Protect Passwords and Personal Information
Privacy and security settings are crucial data for everyone on the web and they must be protected. Do not use a generic form of password like a common name. Always encrypt passwords with numbers and alphabetic characters and do not use a “one password” approach. Additionally, if all passwords are stored on the computer in one file, this becomes a valuable file for an outside source. There are several free password managers available online that offer stronger protection.
5. Avoid International Contacts
These operators target victims across national borders because the legal systems do not exchange jurisdictional authority. They can also be very difficult to trace because of the various capacities for anonymity. If the offer is unsolicited and international this is an obvious red flag, often being a loosely structured scam such as an email lottery notification.
The United States Securities and Exchange Commission deems this activity as becoming much more prevalent and the methods of personal financial protection are very important. Any investor considering using social media as an investment strategy should do some research on what the American government suggests and follow those suggestions when applicable. Always be careful with your money.
Former news reporter Ann Bailey provides these tips for anyone thinking of investing with sources they have discovered online. Helping protect clients from online scams, the investment fraud lawyers at Page Perry, LLC work strenuously to advise them about valid investment opportunities, and steer them away from money scams advanced through social media and other broadband shenanigans.
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