Securities Fraud Lawyers Blog
Investors Beware: Paid-to-Click Fraud
There’s a new online scam targeting investors. The Securities and Exchange Commission (SEC) has issued an alert to investors to watch out for Paid-to-Click (PTC) fraud. PTC scams involve fraudsters duping investors out of money for purchasing online advertisements.
With Paid-to-Click fraud, investors are targeted by scammers who promise a share of profits for the upfront purchase of ad bundles and packages. Some scams may promise easy financial returns and online advertising space while others simply promise returns in exchange for an upfront fee alone.
While PTC investment opportunities can be a legitimate source for passive income, you need to be aware of the risks of paid-to-click fraud. Here are some red-flags to watch out for if you are approached with a PTC investment opportunity.
Promise of easy money
We all know there’s no such thing as money for nothing. If you’re approached with a paid-to-click opportunity promising easy money in for minimal investment on your part, it’s most likely a scam.
Investments requiring money up front
Most PTC opportunities are just that: opportunities. No legitimate paid-to-click investment should be asking you for money upfront, even if it’s for a membership or subscription plan.
Lack of product or service revenue
Look up the financials of any company offering you a paid-to-click opportunity. If the company is legitimate, you should be able to find revenue for the goods or services advertised. If you only find incoming revenue from existing members, it’s more than likely paid-to-click fraud.
False or transient business address
A good way to check that any company is legitimate is to verify its listed business address. It should have a verifiable physical location. If the company lists offices remotely, call the virtual office service provider and enquire whether the company’s presence can be confirmed.
Issues with funds withdrawals
If you have any issues withdrawing funds from your investment account, this could be a major red flag. If you are unable to withdraw funds or the company requires you to reinvest your profits, it could mean that there is not enough money to pay off existing investors.
Unfortunately, this red flag might come to late for some investors. If possible, request a review of the company’s investment plan(s). Make sure there are established procedures for repayments and withdrawals.
Investor Resources
For more information on paid-to-click fraud or to report a scam, see the full SEC bulletin. If you have questions about investment-loss recovery resulting from paid-to-click fraud, contact our team.