How to Avoid Natural Disaster Fraud During Hurricane Season
June 14, 2022
It seems as if hurricanes are more prevalent than ever these days—particularly in Florida. And although it may not be possible to predict when and where hurricanes may strike in the future, you can be sure that scammers will come out of the woodwork following the next natural disaster. So, in order to protect yourself from natural disaster fraud during hurricane season in Florida, please review the information below and contact an investor representation attorney for more guidance.
Tips For Avoiding Hurricane-Related Scams
When a natural disaster strikes, be on the lookout for the following scams:
Upfront fee scams – Upfront fee scams charge investors in advance in order to access services, claim benefits, or apply for disaster-related loans.
Pump-and-dump stock scams – Pump-and-dump stock scams involve the marketing of stocks and other investments with promises of big gains. However, as investment prices peak, scammers unload their shares, keep the profits, and leave investors with losses or worthless stock. The people who run these scams will often use natural disasters to build demand for their products.
Phishing scams – Phishing scams are ploys used by scammers to get people to reveal certain personal information. These scammers often impersonate financial regulators or government agencies to gain the trust of victims, and they sometimes do so in the aftermath of natural disasters.
Common fraud tactics
In addition to the common scams above, fraudsters often employ the following tactics when attempting to swindle victims out of their money:
Guarantees – When it comes to financial investments, there are no guarantees. Therefore, it is important to always be cautious when dealing with someone offering a “can’t-miss” investment. This is a common sign of fraud.
Pressure – Financial professionals should never pressure clients to make particular investments. Whenever someone pressures a potential investor to decide immediately on a financial opportunity or requests an upfront fee for disaster-related financial assistance, it’s almost certainly a scam.
Unregistered financial products – Financial scams following natural disasters often involve unlicensed individuals selling unregistered financial products. An unregistered financial instrument is never a safe investment.
Scarcity – Those who are looking to defraud investors know how to create a false sense of urgency by creating the illusion of scarcity. This is simply another way that fraudsters trick investors into quickly parting with their money.
Are You A Victim Of Natural Disaster-Related Fraud?
At Simms Law, P.A., one of our primary focuses is the representation of investors—including those investors who are victims of financial fraud. Financial fraud can occur in a variety of ways, including in the aftermath of natural disasters. At Simms Law, we always take our clients’ concerns seriously and are aware of what is at stake when an investor becomes a victim of financial fraud of any kind. If you’ve been defrauded following a natural disaster or believe that you have been misled about the nature and risks of any of your investments, please contact us today for a free consultation.