Broker Check

Beware of Fraudulent CD Offers

November 11, 2019

The Securities and Exchange Commission (SEC) has issued a warning to investors to avoid falling prey to scammers offering phony Certificates of Deposit (CDs). The SEC has seen a rise of websites that offer CDs or other financial products as a way to steal an individual’s money or personal information.

These websites are often found via internet searches for high CD rates. The websites are designed to look very similar to those of reputable financial institutions but are not actually associated with a bank or financial institution. They tend to offer CD rates that exceed those of reputable financial institutions and often require very high minimums to invest, which can be as high as $200,000.

They claim the deposits are covered by FDIC and that they are registered with banking and investment regulators, but in reality there is no registration with the SEC or FDIC. The sites direct individuals to wire the funds for deposit to a different bank than the bank they claim is offering the investment or in some cases the wiring instructions are for a bank that is outside the US.

As with any financial offer or advertisement it is important to be skeptical and remember that if it looks too good to be true it probably is.