Protect yourself
Fraud & scam prevention
Protect your money from investment fraud. Learn the red flags, verify before you invest, and know where to turn if something looks wrong.
Self-directed investing puts you in control — and that control is exactly what fraudsters target. A directed custodian holds and processes what you direct; it does not vet, endorse, or verify any investment. Research every opportunity thoroughly before any money moves.
Be especially wary of unsolicited pitches promising “guaranteed returns.” Before you invest, verify the seller’s registration with FINRA BrokerCheck and confirm the individual or firm through the SEC’s Investor.gov background check.
Key red flags to watch for
Guarantees and low risk
Every legitimate investment carries some risk. If someone promises guaranteed, risk-free, or remarkably consistent high returns, it is almost certainly a scam.
High-pressure sales tactics
Fraudsters manufacture urgency. If you’re pressured to “act now,” invest immediately, or keep the opportunity secret, walk away.
Unsolicited communications
Be highly suspicious of get-rich pitches arriving by cold call, text, email, or direct messages on social media and dating apps.
Fake websites and deepfakes
Scammers clone legitimate institutions’ websites and use AI-generated deepfakes of public figures. Always verify URLs and check the source independently.
Actionable verification steps
- Do your own digging. Search the company or program name together with the words “review,” “scam,” or “complaint.”
- Verify registration. Confirm that both the investment and the person selling it are registered — check FINRA BrokerCheck, Investor.gov, and the SEC EDGAR database of registered offerings.
- Never pay by unconventional methods. Be extremely wary of requests to pay with cryptocurrency, wire transfers to personal accounts, gift cards, or payment apps.
- Consult an expert. Before committing funds, discuss the investment with an objective, licensed financial advisor, lawyer, or accountant.
Verify before you invest
FINRA BrokerCheck
Check whether a broker or firm is registered, and review their background and disciplinary history.
Check a broker or firm →SEC Investor.gov
Background-check individuals and firms, and use the SEC’s investor-protection and fraud resources.
Open Investor.gov →Self-directed accounts need extra care. In a self-directed IRA the custodian does not review or approve your investments — the diligence is entirely yours. Before you direct any alternative-asset transaction, also screen it for prohibited-transaction risk with the prohibited-transaction checker.
If you suspect fraud
Act quickly, and report it — reporting helps regulators stop the scheme and may help you recover.
- U.S. Securities and Exchange Commission — report at sec.gov/tcr.
- FINRA — file a complaint at finra.org.
- Your state securities regulator — find it through NASAA.
- Federal Trade Commission — report at reportfraud.ftc.gov.
Sources include the SEC (Investor.gov), FINRA, and the FTC. This page is general educational information, not legal or investment advice.
Educational only. This page is general information, not individualized investment, legal, or tax advice. Rules depend on your account type, transaction, tax year, and circumstances — consult a qualified professional.