OCT 07, 2021

South Carolina Attorney General warns about imposter schemes

(COLUMBIA, S.C.) – The Securities Division of the Office of the South Carolina Attorney General is warning investors about a growing number of online schemes in which bad actors are posing as regulatory agencies or impersonating registered individuals or firms in the securities industry.  While imposter schemes are not new, fraudsters are utilizing technology to make these schemes more sophisticated and difficult to spot.

Investors should be aware that fraudsters may impersonate a regulator or registered firm by utilizing technology to create a fake website, misrepresent the business location or headquarters, or deceive investors or others in the securities industry by using fraudulent phone numbers.  For example, the Securities Division recently issued a Cease-and-Desist Order to individuals claiming to be securities regulators going by the name “Central Trade and Financial Authority” (CTFA).  Among other items, the “CTFA” website misrepresented that it was headquartered in South Carolina and listed a fraudulent phone number. The Division determined that it was, in fact, a fictitious entity that used fraudulent regulatory authority to defraud.

“Although the Internet has many useful purposes, not everything on the Internet is what it seems,” says Attorney General Alan Wilson.  “Unfortunately, technology has given bad actors more tools to defraud the public, which is why it is important to take steps to verify the identity of individuals or organizations before sending money.” 

South Carolinians can take steps to protect themselves by being aware of the tactics that may be used to perpetrate imposter fraud, which may include the following:

  • Anyone can be anyone on the Internet. Fraudsters can be quite good at producing professional looking websites. These websites can easily be faked.
  • Fraudsters are attempting to trick investors and others by registering domain names for fraudulent websites that are very similar to domain names for legitimate websites.
  • Registered parties are required to truthfully disclose all material facts, and they must disclose the risks associated with each product. On the other hand, bad actors will often minimize or conceal risks, and use hyperbole to tout profits and payouts. Investors should pay attention to these details, as they can provide clues about the potential illegitimacy of a scam.
  • As a general rule, do not give out personal information in response to random emails, texts, or phone calls even if they appear to be from a reputable individual or government organization. Visit government websites directly for trustworthy information.
  • Fraudsters may set up profiles impersonating registered investment professionals on popular social media platforms and then message investors to solicit their money.
  • Look for the typical mistakes, such as poor grammar, misspellings, odd or awkward phrasings, or misuse of investor terminology. In addition to these, be on the lookout for websites using the registered representative’s name as the domain name for the website (e.g., firstnamemiddlenamelastname.com). 
  • If a call, e-mail, or letter purports to be from a business or government agency, take the time to independently verify its accuracy. Find the agency’s phone number from a separate, reliable source, such as its official website. DO NOT use any numbers, e-mail addresses, or websites provided in the letter itself, as they may be fraudulent.
  • Don’t rely on caller ID to determine if a call is legitimate. Scammers use spoofing tools to make it appear they are calling from a genuine government or business number.
  • Scammers favor asking for payment by wire transfer, gift card, prepaid debit card or cash because these methods are difficult to track.

If you are suspicious about information you receive from an individual or firm soliciting your business, or if you think you have been contacted by someone impersonating a legitimate entity in South Carolina, contact the Securities Division at 803-734-9916.  The Securities and Exchange Commission (SEC) maintains a national list of Impersonators of Genuine Firms. This list is not exhaustive; firms may be impersonated even if they are not on the list. To check the registration status of an investment professional or firm, contact the Securities Division of the Office of the South Carolina Attorney General.

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For media inquiries please contact Robert Kittle, rkittle@scag.gov or 803-734-3670

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