Looking for new investments in 2023? Here's how to protect yourself from 'boiler room' schemes

Saturday, January 7, 2023 7:06PM

CHICAGO (WLS) — You may be looking to make a new investment in 2023, but watch out!

The IRS Criminal Investigation Office said each year, thousands fall victim to boiler room schemes. These schemes use high-pressure sales techniques to convince victims to invest in fictitious investments that appear to be real.

  • Don’t complete online requests for personal information from websites asking if you are interested in investing. Fraudsters use that information to target you.
  • Don’t think that a website means the investment is legit. Fraudsters clone real investment company websites or make them up all together with a fake company name.
  • Double check employment information. Just because a cold-caller uses the names of legitimate brokers listed on a company’s website doesn’t mean they are really affiliated with those brokers.
  • Do your own research. Fraudsters use online platforms to generate fictitious performance data for stocks that don’t really exist.
  • If you find yourself a victim of one of these schemes, do not pay a fee or tax to the fraudsters to withdraw money. You will end up losing more money and then the fraudsters will end communications with you.
  • Report fraud to law enforcement. Submit form 3949-A, Information Referral, if you suspect an individual or a business is committing fraud.

See more quick tips here.

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