Beware of Advance Fee Scams

The District of Columbia Department of Insurance, Securities and Banking is warning District consumers to be on the alert for advance fee scams.

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Advance fee scams solicit investors to pay a fee upfront—in advance of receiving proceeds, money, stock or warranties—to complete a deal or transaction. The advance payment may be described as a fee, tax, commission or incidental expense that will be repaid later.

For example, the Department received an online complaint about a scam being conducted by individuals claiming to be representative of the fictitious US Government Agency named the Department of Financial Regulators. The fictitious agency is purportedly located in the District of Columbia. In one instance, the perpetrators wanted the consumer, a British citizen, to pay $12,000 for shares in a company; it was not disclosed that the company was being liquidated.

Some advance fee schemes target investors who purchased underperforming securities; the investors are offered the opportunity to sell those securities if an advance fee is paid. The perpetrators also target investors who have already lost money in investment schemes.  

If you are contacted by an organization claiming to be the Department of Financial Regulators or any potential scammer, you should note the time and date of the call, the name of the caller, the caller ID information and what the caller says. You should not provide the caller with your personal information. Instruct them not to call you again and hang up the phone.

If you believe you have been a victim of an advance fee scam, another type of financial scam or have questions, please contact the Enforcement and Consumer Protection Division of the District of Columbia Department of Insurance, Securities and Banking at 202-727-8000.