In the wake of widespread damage caused by Hurricane and Tropical Storm Harvey in Texas, the Minnesota Commerce Department is cautioning investors to watch out for opportunistic investment scams.
“As we are seeing in Texas, natural disasters bring out the best in people, with neighbors helping neighbors. Unfortunately, we know from experience that disasters also can bring out the worst in people, particularly those seeking to profit from the misfortune of others,” Commerce Commissioner Mike Rothman said. “Unsolicited investment offers seeking to capitalize on the aftermath of Hurricane Harvey should be approached with extreme caution.”
Commissioner Rothman urged investors to watch for red flags of hurricane-related scams, including unsolicited email, social media messages, crowdfunding pitches or telephone calls promoting investment pools or bonds to help storm victims, water-removal or purification technologies, electricity-generating devices and distressed real estate remediation programs.
Scam artists also may linger to prey on storm victims who anticipate receiving large lump-sum insurance settlements. “The potential for fraud remains even after the skies have cleared. Be wary of any promoter promising quick and high returns on your investments,” Commissioner Mike Rothman said.
Commerce also cautioned about fraudulent charitable solicitations that prey on the goodness of people seeking to help those in need. “The best advice is to do your research. Give to those charitable organizations that are registered properly with state authorities. As with any charitable contribution, those who want to contribute to relief efforts should send contributions to only those charities with an established track record of making sure the donations get to the victims,” Commissioner Rothman said.
Commerce offered three tips to help investors avoid disaster-related scams:
- Delete unsolicited emails or social media messages and hang up on aggressive cold callers promoting hurricane-related investments, especially those from small companies touting unproven or new technologies or products.
- Use common sense. Claims of guaranteed returns or low/no investment risk are classic red flags. Every investment involves some degree of risk.
- Do your homework. Contact the Commerce Department to check that both the seller and investment are licensed and registered. If not, they may be operating illegally. You can check the status of an individual’s ability to offer investments using the License Lookup tool at the Commerce website or if an investment is registered with the Commerce Department by calling 651-539-1638.
Commerce is here to help
If you have a question or believe you have been a victim of fraud, contact the Commerce Department’s Consumer Services Center by email at [email protected] or by phone at 651-539-1600 or 800-657-3602 (Greater Minnesota).