TDCI Securities Reminds Consumers to Learn The Red Flags of “Imposter Scams”

Monday, June 17, 2024 | 12:10pm

NASHVILLE  - The Tennessee Department of Commerce & Insurance’s (“TDCI”) Securities Division is warning Tennessee consumers about the growing prevalence of so-called “imposter scams” and sharing tips on how investors can protect themselves from losing their personal information or hard-earned money.

An imposter scam (which is sometimes referred to as “spoofing”) occurs when a scammer pretends to be someone else in order to trick a victim into giving out his or her personal information or money. While impersonation isn’t a new trick, modern scammers and fraudsters are using publicly available information as well as modern technology to cloak their true intentions.

“In the hands of a scammer, a public database of legitimate brokers and investment advisers can be used to earn consumers’ trust in order to steal their money or personal information,” said TDCI Commissioner Carter Lawrence. “By learning the red flags of these schemes, asking questions, and conducting research, Tennessee consumers can avoid falling victim to their schemes.”

A simple imposter scam may involve a cold call where the imposter claims to be someone a victim might trust in order to get the victim’s money via a “can’t miss” investment. In reality, the “investment” does not exist, and the scammer gets away with it scot-free. More complex scams can involve fake email addresses, websites, documents and other items in order to create the appearance of legitimacy where none exists.

A new blog post shines a light on how an imposter scam works.

“Tennessee investors know that TDCI’s Securities team is here to answer any questions that Tennesseans may have about the legitimacy of a purported securities professional,” said TDCI Assistant Commissioner for Securities Elizabeth Bowling. “We can provide information about whether an investment professional is registered to buy or sell securities or offer investment advice, and whether the professional has any regulatory actions or other disciplinary events in their past. I urge investors to contact us with their questions before making an investment.”

In Tennessee, the punishment for spoofing increased in 2017 with the revision of the Anti-Phishing Act of 2006. It is now a Class A misdemeanor to send inaccurate or misleading caller ID information with the intent to defraud, harm or steal. Under the legislation, the Tennessee Attorney General may seek a court order and recover a penalty of up to $10,000 per violation.

How to Protect Yourself from Imposter Scams

  • Check legitimate registration sources and contact TDCI’s Securities Division to ensure you’re investing with someone authorized to engage in the activity.
  • Look for typos, misspellings, and factual discrepancies that may appear in any investment solicitation.
  • Don’t answer the phone if your number shows up on your phone’s Caller ID. Don’t attempt to call the number back, and do not press any buttons if prompted. If you do answer the call, never give out your personal or financial information. Never give your personal information over the phone to someone you don not know.
  • Use contact information available from BrokerCheck and IARD to independently verify the identity of someone who solicits you to provide personal information or investment funds. Make sure you’re dealing with a bona fide securities professional.
  • Remember: If something seems too good to be true, it probably is.

Question about an investment? Contact TDCI’s Securities Division online or call 800-863-9117 for more information.