Common Scams

Scammers use a variety of techniques to convince investors to hand over their hard-earned money. They often target victims through social media and investment-related group chats.   
 
Scammers convince investors to invest more and more into accounts that are not real and then steal the funds. As a result, victims typically lose everything they invested, and are targeted again in new or related scams.   
 
The following are common — and often related — scams reported to the SEC’s Office of Investor Education and Advocacy. 

  • Relationship Investment Scams. In a relationship investment scam, scammers reach out online or through text messages, attempting to build trust through friendship or a romantic connection to convince you to put money into phony investments.  
     
  • Advance Fee Fraud. If someone has asked you to pay money for taxes, fees, or any other reason before your funds will be released from an investment opportunity, you may be experiencing a scam. This scam is often associated with fictitious investment accounts that have quickly increased in value.  
     
  • Impersonation Schemes. If someone contacts you claiming to be from the SEC and requests an upfront payment to recover or release funds, this is a scam. Scammers also impersonate registered firms or individuals and may set up an account name, profile, or handle designed to mimic a particular firm or individual. 
     
  • Stock Tip Scams. Stock recommendations you receive through social media, including investment-related group chats, may be part of an investment scam. Scammers may promote a stock anonymously or while impersonating someone else, and then profit at investors’ expense (sometimes referred to as a pump and dump scheme).

Protect your money from further investment scams by keeping an eye out for 5 tactics scammers may use:
  1. Connect with you through social media, text messages, or messaging apps and gain your trust over time.
     
  2. Urge people to buy an investment to pump up the price so that they can sell it at a high price (then the price drops and you lose money).
     
  3. Impersonate trusted sources like legitimate investment professionals or government agencies.
     
  4. Exploit emerging technologies.
     
  5. Demand fees or costs that they falsely claim will allow you to withdraw from your account, or to recover losses.
Learn more about these tactics.

Report investment scams to the SEC at sec.gov/tcr. You can also report to:  

Last reviewed or updated: November 20, 2025

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