There’s a new online scam targeting investors. The Securities and Exchange Commission (SEC) has issued an alert to investors to watch out for Paid-to-Click (PTC) fraud. PTC scams involve fraudsters duping investors out of money for purchasing online advertisements. With Paid-to-Click fraud, investors are targeted by scammers who promise a share of profits for the upfront purchase of ad bundles and packages. Some scams may promise easy financial returns and online advertising space while others simply promise returns in exchange for an upfront fee alone. While PTC investment opportunities can be a legitimate source for passive income, you need to be aware of the risks of paid-to-click fraud. Here are some red-flags to watch out for if you are approached with a PTC investment opportunity.

Promise of easy money

We all know there’s no such thing as money for nothing. If you’re approached with a paid-to-click opportunity promising easy money in for minimal investment on your part, it’s most likely a scam.

Investments requiring money up front

Most PTC opportunities are just that: opportunities. No legitimate paid-to-click investment should be asking you for money upfront, even if it’s for a membership or subscription plan.

Lack of product or service revenue

Look up the financials of any company offering you a paid-to-click opportunity. If the company is legitimate, you should be able to find revenue for the goods or services advertised. If you only find incoming revenue from existing members, it’s more than likely paid-to-click fraud.

False or transient business address

A good way to check that any company is legitimate is to verify its listed business address. It should have a verifiable physical location. If the company lists offices remotely, call the virtual office service provider and enquire whether the company’s presence can be confirmed.

Issues with funds withdrawals

If you have any issues withdrawing funds from your investment account, this could be a major red flag. If you are unable to withdraw funds or the company requires you to reinvest your profits, it could mean that there is not enough money to pay off existing investors. Unfortunately, this red flag might come to late for some investors. If possible, request a review of the company’s investment plan(s). Make sure there are established procedures for repayments and withdrawals.

Investor Resources

For more information on paid-to-click fraud or to report a scam, see the full SEC bulletin. If you have questions about investment-loss recovery resulting from paid-to-click fraud, contact our team.

Although they sound similar, customer advisory centers differ from call centers in several important ways. Securities firms and investment broker-dealers typically rely on call centers to handle basic customer service issues and administrative functions. They do not provide investment or trading advice, nor do they earn commissions on trades and deals. Customer advisory centers, meanwhile, are call centers staffed by securities professionals. They are able to provide trade and investment advice as well as sell securities services. A customer advisory center is typically designated to clients with:

• Portfolios under $100-250,000
• No current assigned broker-dealer

What Investors Need to Know

Customer advisory centers can be a useful resource for securities firms and investors alike. Securities firms can refer casual investors to a center that can handle general investment questions and services while focusing dedicated broker-dealers and advisors on more diversified or high-level investors. Alternatively, they can help investors facilitate transactions and order services without meeting with advisors. Despite the benefits, customer advisory centers do pose certain risks that investor should know about. Customer advisory centers are generally set-up to offer center brokers incentives for selling certain securities and brokerage services. This may give way to practices that may not be within investors’ best interest. Investors should be wary of:

• Aggressive sales tactics promoting certain products and services
• Attempts to gather irrelevant customer information
• The promotion of “no fee” or “no cost” goods and services
• Information that is misrepresented or omitted in advice or contracts
• Failure to disclose complete cost brackets for goods and services

Investor Resources

For more information on customer advisory centers, check out this FINRA advisory bulletin. If you believe you have received misrepresented information or inaccurate investment advice from a customer advisory center that has resulted in improper fees or investment loss, contact Savage Villoch Law, PLLC to find out potential recovery options.

Even the most careful and diligent investors can get stuck in an investment fraud scheme without an investment fraud attorney. Florida residents who have been victimized by an investment fraud scheme (i.e., a Ponzi scheme, stock portfolio loss, negligence on the part of your stockbroker or financial adviser) will need a Florida investment fraud attorney, and we at the Savage law firm are here to help. While it can be distressing to learn that you have lost thousands — if not hundreds of thousands — of dollars as a result of an investment fraud scheme, it should serve as some comfort to know that both state and federal laws protect you, the investor, from negligent, unsuitable, or otherwise illegal behavior by your investment advisers and/or stockbrokers; should you be a victim of such predatory behavior, these same laws also provide that you, the investor, can seek financial remedies against those same financial advisers and stockbrokers. Of course, it’s never as easy as just asking for your money back, and getting it. The actual process of obtaining restitution for your losses can be a costly legal battle that requires an understanding of complex state and federal laws that most laypeople (i.e., non-lawyers) simply do not have. This is why the assistance of an investment fraud attorney is invaluable. Savage, Combs & Villoch, PLLC offers experienced and highly qualified legal services to individuals, business owners, stock market investors, stockbrokers, and brokerage firms. Located in Tampa, Florida, we have a regional, national, and global practice with a focus on bankruptcy, business, and securities issues. Contact us today for your free, no obligation consultation about your investment fraud case.

A pump and dump scheme is a form of investment fraud where people artificially inflate the price of stock they own, and once it has reached a certain price they will sell it before the price goes down again. The perpetrators of such a scheme raise the stock price by creating synthetic hype around the stock. At one time this was normally done by cold calling. An individual claiming to be an expert stockbroker might randomly call people to inform them of a stock that was virtually guaranteed to go up, and that failing to invest in it would mean missing out on perhaps thousands of dollars. One variant of cold calls would be to leave a message on somebody’s answering machine or voice mail. The message is worded in such a manner that the victim believes the caller had reached the wrong number, and now has access to valuable inside information which must be acted on very quickly. These days such fraud is more often committed online. The Internet allows for far more potential victims to be reached, over a shorter period of time. Messages might be posted on bulletin boards advising visitors to purchase the next hot stock. If enough people take the bait, the stock price will go up. Later posts might point out that the price of the stock in question has, in fact, become more expensive, which leads to even more shares being sold. At some point the perpetrators of the scheme will sell, or dump, all of the shares. This is generally done when they are satisfied with the profits that will result. When a large number of shares are dumped the stock price plummets, usually to a price that is less than what the victims of the scheme paid, resulting in monetary losses for them. Pump and dump schemes generally target micro- and small-cap stocks, because they are most easily manipulated. These stocks do not have a great number of shares being traded, and therefore their price can be influenced by a smaller number of trades. If you have been the victim of a pump and dump scheme, please contact us today to discuss your options.