This scam is a mix of boiler room and what’s called the double dip scheme.
This starts out the same way as a boiler room where you are contacted about an opportunity too good to be true. Once the initial scam takes place, you are contacted again, for a charge to get your rewards. In other words, double-dipping, as they say.
The scammer will contact you, most likely from another jurisdiction other than your own, and offer an investment opportunity for a company that is about to go public. They will go on further to say that if you were to commit now, that there could be larger cash returns after the Initial Public Offering (IPO). They will try to use a company name that sounds familiar but usually they do not work for that organization or they use a name that is a variation of the real companies name.
The scammer will then instruct the investor to wire the money or send a money order to a specified address. Once the scammers have their money they will send you a fake certificate for confirmation of the investment and you probably won’t hear from them again. The scammer will then sell your information to another con artist who will contact you down the road to tell you your investment has made money and it’s time to sell. Knowing that you have been waiting to hear from them for a long time, they ask you send another money order for a processing fee or tax so that they can complete the transaction.
In these types of scams, the money is sent through various jurisdictions so that it can create extra confusion to track down the thiefs. This leaves the victims in confusion as to which jurisdiction to contact in order to file a report.
How can you prevent it?
Call your local securities commission to check if the person is regulated.
If you feel that someone is rushing you or pressuring you, be weary.
Do your research on the person and the investment before you make a decision. Most investments don’t vanish overnight.
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