Investing & Retirement

Investment Tip From a New Contact? Verify the Person First

By Jo Brennan / October 9, 2026 / Updated November 8, 2026

Woman carefully reading a message on her smartphone

The numbers first. The Federal Trade Commission (FTC) says Americans reported $15.9 billion in fraud losses in 2025, and investment scams were the costliest category at $7.9 billion. Of the money reported lost to scams that began on social media, $1.1 billion was investment scams. So when someone you met recently starts talking about an investment, the safest first move is to check who the person is, before you look at what they are pitching. This article covers the pattern regulators describe and the official lookup tools, as of November 8, 2026. It is general information, not a recommendation to buy or avoid anything.

Key takeaways

FTC data for 2025: $15.9 billion in reported fraud losses from 3 million reports. Investment scams led at $7.9 billion.
Social media: $2.1 billion in reported scam losses in 2025, up eightfold since 2020. Nearly 60% of romance scam victims who lost money said it began on social media.
Regulators describe a slow build: first contact, friendship, a fake platform showing fake gains, a small early withdrawal, then pressure for bigger deposits.
Verify the person with official tools such as FINRA BrokerCheck and the SEC’s investment professional search, and reach organizations through contact details you find yourself.
The FTC’s rule of thumb: never let someone you have met only on social media direct your investment decisions.

What the loss data say

Two FTC releases from spring 2026 supply the figures. The first is the agency’s March 25, 2026 testimony to Congress, based on reports to its Consumer Sentinel Network. The second is an April 27, 2026 release on social media scams.

Measure (2025)	FTC figure
Total reported fraud losses	$15.9 billion, from 3 million reports (2024: over $12 billion, 2.6 million reports)
Investment scams	$7.9 billion, the most money lost of any category
Imposter scams	Over 1 million reports, over $3.5 billion lost
Losses to scams that began on social media	$2.1 billion; nearly 30% of people who lost money said it started there
Investment scams that began on social media	$1.1 billion, more than half of the social media total
Romance scams	Nearly 60% of people who lost money said it began on social media

The FTC also says Facebook was the platform with the most reported losses, followed by WhatsApp and Instagram. These are reported losses, so they are a floor, not a full count. The FTC pages used here do not give report counts for investment scams.

The pattern regulators describe

The joint World Investor Week 2026 bulletin, issued October 5, 2026 by the SEC with other U.S. regulators and published by FINRA and the CFTC, lists the stages of a relationship investment scam. In order:

A stranger makes first contact by text, social media or a messaging app.
They build a friendship or romance over time, then bring up an investment.
They point you to a fake website or app that shows made-up trading information and gains.
They push for larger and larger sums, and may allow a small early withdrawal to build trust.
When you try to withdraw a large amount or close the account, they offer excuses, ask for more money or claim fees or taxes are owed.
If you question them, they may become angry, stop responding, block you or take the site or app away.

The FTC describes a shorter version in a June 2024 consumer alert. An unsolicited investment offer arrives on a platform such as Facebook, LinkedIn or WhatsApp, often involving cryptocurrency. The sender claims big profits and a special deal with high returns and little or no risk. A link leads to a fake investment site that shows the account growing. Once the scammer has taken as much as they can, the account closes and the scammer disappears.

The common thread: the dashboard is the scammer’s product. A screen showing gains is not evidence that money was ever invested.

Verify the person before the pitch

FINRA’s “Check Registration” page says some bad actors claim to be registered or hand over doctored information, and that scammers may borrow the names of real professionals and firms. Its answer is independent research, with a warning to watch for inconsistencies between what you are told and what you find. Here are the official tools the bulletin and FINRA name:

Tool	What it is for
FINRA BrokerCheck	Brokers and brokerage firms. A summary report includes employment history, qualifications and disclosure events. It also lets you look up investment advisers and links to the SEC’s IAPD for SEC-registered ones.
SEC Investment Adviser Public Disclosure (IAPD), and the SEC’s “Check Out Your Investment Professional” tool on Investor.gov	Confirming registration and checking disciplinary history. FINRA says to check IAPD for advisers who may not be FINRA-registered.
SEC Action Lookup Tool	Individuals who have been the subject of formal SEC actions, per FINRA.
NFA BASIC	Registration and disciplinary history for futures and derivatives professionals.
Your state securities regulator	Additional checks. The bulletin points to NASAA’s “Contact Your Regulator” page.
SIPC membership list	Confirming that a U.S. brokerage firm is a SIPC member.

FINRA suggests a simple question for any professional: who are you registered or licensed with, and in what capacity? Then it says to check the answer yourself. If the person says they are not registered or licensed, FINRA’s page advises not to buy. If they say they are, verify it anyway. A registered name on a screen proves nothing about the person typing, so search the names yourself and do not use links or documents the contact sends you.

When a “regulator” or “broker” is the one reaching out

The bulletin also covers impersonation. Fraudsters may pose as government agencies, brokers or advisers, and messages may falsely appear to come from the SEC, FINRA, the CFTC or NFA. The warning signs listed include requests for account numbers, PINs, passwords, digital wallet private keys or seed phrases, and fake SEC filings or certificates. It also says SIPC will never require payment to obtain protection or help with recovery.

The verification rule is the same one: confirm an organization’s identity by calling a number from its public website, not one supplied by the person contacting you.

A checklist of safe checks

Do not respond to unexpected investment offers on social media, and be wary of anonymous or impersonated accounts. That is the FTC’s advice.
Write down the person’s full legal name and the firm they claim, then search both in BrokerCheck and the SEC tool yourself.
Reach any firm or agency through a phone number from its public website.
Treat promises of high returns with little or no risk as a warning sign. The FTC says all investments carry risk and none guarantee returns.
Be skeptical of any request for passwords, PINs, account numbers, wallet keys or seed phrases.
Search the company name plus “scam” or “complaint” before putting money in, as the FTC suggests.
Limit who can see your posts and contacts by adjusting your privacy settings.
Pause if questions go unanswered, and note which ones.

If money has already gone

The bulletin pages do not lay out a recovery plan, but they do list where to report. The FTC points to ReportFraud.ftc.gov and the SEC’s tips and complaints page at sec.gov/tcr. The bulletin lists the SEC investor assistance line at (800) 732-0330, the FINRA Securities Helpline for Seniors at 844-574-3577, your state securities regulator and FINRA, where you can file a complaint or tip. Commodity and derivatives complaints go to the CFTC.

Frequently asked questions

Is it a scam if the person turns out to be registered?

Not necessarily, and not necessarily safe either. Registration is a fact about one person or firm. FINRA warns that scammers can use real professionals’ names, so check that the contact you have is really the registered person, and then think separately about the product.

What if I cannot find the person in any database?

FINRA’s page says that if a professional tells you they are not registered or licensed, it advises you not to buy. A person missing from a database is a reason to stop and ask questions, not to keep going.

Can I rely on a trading screen showing gains?

No. The regulators describe fake sites and apps that show fabricated gains, and say scammers may allow a small early withdrawal to build trust.

Does the bulletin tell me what to invest in?

No. It is investor education about staying steady through changing economic conditions and recognizing fraud.

Before you decide

Treat identity, credentials and the investment as three separate questions. A real firm name answers none of them by itself. If someone you have been talking with keeps steering you toward a particular platform, slow down and run the checks above before you send anything. The SEC’s October 5 release also points to the free investor-education material on Investor.gov. For a decision about your own money, a licensed professional can help, once you have checked their registration yourself.