July 25, 2013 12:00 am | Author: investright

In this blog post, I will be writing about a surge in stock spam and how social media is being used to update an old scam that has been used to take money from older people for years.

Pump-and-dump schemes on the rise in U.S.

The Securities and Exchange Commission and the Financial Industry Regulatory Authority are telling investors to be wary when checking their e-mail in-boxes due to a sharp increase in emails linked to so-called “pump-and-dump” schemes. The regulators issued the warning after Intel Corp.’s McAfee Internet Security reported that it counted 1.9 trillion global spam messages in March 2013, which is twice the volume it counted in December 2012. The company confirmed that there was a significant rise in the percentage of pump-and-dump e-mails, even though it didn’t know the exact percentage.

Stock spam is an ongoing threat to British Columbians too. According to the 2012 CSA Investor Index, half (49%) of the most recent investment fraud encountered by Canadians came through e-mail. News that global stock spam is on the increase is a signal to people here to be extra cautious when checking and responding to their e-mail. If you encounter e-mail stock spam, you should report it, and then immediately delete it.

A new twist on an old scam
Scammers are now using social media and the Internet to run a more sophisticated “grandparent scam” or “emergency scam”, according to Massachusetts Secretary of State, William F. Galvin. Using social media and the Internet, con artists will amass information about an individual in order to use it to call a family member (usually a grandparent). On the call, the scammer says the young family member (a grandchild, niece, or nephew) is in trouble and needs money. Scammers use the information they’ve gathered to give specific details about the fictional emergency, and then tell the victim to send money to make the problem go away. In many cases, they are able to extract thousands of dollars from concerned relatives.

Even though this is not an investment scam, it illustrates how fraudsters are going online to gather information about individuals. It is a reminder to be extremely careful when sharing information about yourself or your investments online. Scammers are always looking for ways to extract money from those who have been a victim of investment fraud. We call these types of scams, “re-up” or recovery room schemes.

Spotting and reporting Internet promotions
For more information on how to spot and report Internet promotions, visit our Avoid Investment Fraud section. Here you will find a web page and a checklist on how to protect yourself from Internet investment fraud.
You can report suspicious activity to us using our “Report a Scam” form, or by contacting our Inquiries Group at 1-800-373-6393 or by e-mailing inquiries@bcsc.bc.ca.
 



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