Investors should beware of offers to recover money lost from securities investments for an upfront fee, according to an investor alert issued Monday by the Washington, D.C.-based Financial Industry Regulatory Authority (FINRA).
In particular, FINRA cautions investors who live outside the United States that some of these offers may be fraudulent.
“While it’s very enticing to hear you might be able to recover money lost from a previous investment or investment scam, some investors end up losing even more money to unregistered con artists who run so-called ‘recovery scams’,” says Gerri Walsh, senior vice president of investor education at FINRA, in a news release.
Lists of previous victims are often kept and sold, FINRA says, so it is common for securities fraud victims to be approached repeatedly.
The alert details a series red flags for investors, including high-pressure calls from organizations claiming to work closely with the U.S. government; and unsolicited offers to help recover investment assets.
“Fraudsters can paint a very credible story to persuade you to send money in advance to get back at least some of what you originally lost. But the sad fact is that the money you send may itself be lost for good,” Walsh adds.