Imposter Frauds

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Imposter frauds involve scammers who impersonate government officials, law enforcement officers, billionaires, or celebrities in order to steal money from unsuspecting victims. 

The Setup

Imposter fraud can appear in your social media feed, in search results, and in your email inbox. Imposters also text and call. Imposters can even come knocking on your door or be introduced to you by friend.

Fraud is a crime of deception, and most perpetrators lie about who they are and what they can do. They may pose as trading experts, crypto millionaires, possible life partners, law enforcement, or government employees. But there are ways to avoid cons if you know how.

Imposter frauds, like most frauds, rely on three key responses: 

1.    Grabbing your attention
2.    Getting you to engage
3.    Raising your emotional state

A criminal may actively try to get your attention through targeting. Maybe they’ve researched your social profiles and identified your profession, where you went to school, where live, and what you like. They look for people with money and information they could use to steal it.

One of the most common targets are previous fraud victims. People who have had their money stolen by fraud are re-victimized because their information has been posted on the dark web, where fraudsters buy and sell victim's information.

Criminals can also broadcast messages to people who meet certain criteria. They may be looking for people who are socially isolated, risk seekers, speculators, new traders, or experienced investors. They use data, spam email, messaging apps, recorded telemarketing calls, and tools to target social media or search advertising, to reach large groups of people and see who responds.

The Fraud

To build their credibility, imposters use fake social media profiles, official looking documents with government seals, expensive cars and clothes, or fake trading records, websites, and financial documents.

The fraudster's goals is to engage with you. Once they engage, fraudsters probe and try to trigger emotional responses. If you're a past fraud victim, they may tell you they can get your money back, or already have it. They may use threats and demand payment. Or they may lull you into believing they want to help you improve your trading, or make bigger profits with little or no risk.

Most ploys rely on urgency, either the fear of missing out or the fear that if you don’t act now, you may be punished in some way. Hope is another strong motivator—such as the hope you’ve found true love or that you might get your lost money back, for example. When most people are scared, anxious, or excited, they tend to make unrealistic errors and fail to examine and rigorously question the details of what they're being told.


Do's and Don'ts
The Do's The Don'ts
  • Do restrict your privacy settings on social media. Only allow personal information to be viewed by people you know and trust.
  • Do verify the call or email before disclosing any sensitive personal or financial information, including social security numbers, digital wallet private keys or seed phrases, account information, PINs, or multi-factor authentication codes. Get the caller’s or sender’s pertinent information and then end the communication. Search for the entity’s official website and call customer support directly. Do not use links or phone numbers supplied by the caller or email. 
  • Do learn more about fraud and stay current on the latest schemes through credible entities such as state and federal government or law enforcement agencies, including the CFTC, SEC, Department of Justice, FTC, the Consumer Financial Protection Bureau, FINRA, National Futures Association (NFA), your state securities regulator or attorney general’s office.
  • Do thoroughly check out people or firms before you trade. 
    • Are they registered with federal or state authorities? Relying on registration alone won’t protect you from fraud, but most scams involve unregistered entities, people, and products.
    • Can you find reliable third-party reviews online? Don’t trust on-site testimonials.
    • Look up the site’s domain registration to see if its age matches its claims, and if it displays a headquarters address, do a street-level online map search to see if it looks like a legitimate place of business.
  • Don’t engage. Presently, most investment frauds begin on social media, which is designed to feed users content the algorithms determine will be most likely to grab your attention and cause you to respond. Commenting, accepting friend requests from people you don’t know, and engaging in online discussions, could open the door to possible frauds. If you get unsolicited emails, don’t open them. Delete them instead. Don’t answer calls from phone numbers you don’t recognize. Ignore random SMS or messaging app messages. If you don’t engage with fraud, you won’t fall victim to it.
    • Don’t give personal, payment, or account information over the phone or by email. Even providing an email and phone number could open the floodgates to more fraudulent solicitations.
    • Don’t pay money upfront for fraud recovery services. Be alert to deposits or other seemingly small fees. Sometimes fraudsters ask for small amounts of money at first, but the frequency of requests and amounts increase over time.
    • Don’t trade or give money to people you only know online.
    • Don’t trade in markets or products you don’t fully understand. One of the best investments you can make is knowledge. Learning about markets, knowing the risks, and having a risk management plan -- including how much you can afford to trade and lose -- are the best ways to avoid fraud and make informed decisions.


For More Information

Customer Advisory: Beware Offers to Receive and Forward Money

Customer Advisory: There’s Nothing to Like about Scammers on Social Media

Customer Advisory: Avoid Forex, Precious Metals, and Digital Asset Romance Scams

Article: Beware Imposters Posing as CFTC Officials

Article: Don’t be Re-Victimized by Recovery Frauds

Impersonation Schemes,

How to Avoid a Government Impersonator Scam, Federal Trade Commission

Refund and Recovery Scams, Federal Trade Commission

Don’t Fall for 'Regulator' Imposter Ploys, FINRA