RALEIGH, N.C. (February 24, 2020) – Millions of people have started using micro-investing apps, which allow users to invest extra cash in stocks right from their smartphone. Better Business Bureau serving Eastern North Carolina is warning consumers about recent complaints against popular investing apps claiming.
Investment scams can take many forms, but all entice victims with the promise of reaping a large reward with little-to-no risk. With a low barrier of entry, modern investing apps attract first-time investors seeking to make money with little risk and time commitment.
In recent months BBB has received complaints about investor apps, including users claiming the companies did not respond to account inquiries, delayed or prevented users from trading certain stocks, or prevented users from withdrawing money from their account.
Information on investing apps such as consumer reviews, complaints, and BBB ratings can be found at bbb.org.
BBB Tips for Using Investing Apps:
- Be very wary of buzz words. Certain phrases should raise a red flag for an investment opportunity. Don’t believe anything that is “guaranteed” to do well, or that offers low or no risk with a high return. Pyramid schemes (even if they are not called that) require you to bring in other investors in order to recoup your initial investment.
- Do your research. In addition to researching the business in general, be sure you are familiar with the process of investing and/or daily trading.
- Look for registered businesses. Be wary if investments are unregistered with the SEC or other investment industry regulators. Also, check licensing for the sellers.
- Confirm security and insurance. Do they have security/ privacy settings such as two-factor authentication? Is the app/company insured by a group like the FDIC? If not, it is possible your personal information could be stolen and you could lose thousands of dollars.
- Beware of high-pressure sales tactics. Many risky investments are sold at “opportunity meetings” or other high-pressure situations.
- Question the lack of a commission fee. While it seems enticing you would not have to pay a commission fee to buy/sell/trade, this can be a red flag that the investor network is not legitimate or there may be hidden fees elsewhere.
- Customer service is key. When a business is not responsive, it can be a red flag that they are hiding something. With a lot of money at stake, you need to be able to get in touch with your investment source.
If you think you have been the victim of these scams, report them to BBB’s Scam Tracker at bbb.org/scamtracker.