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NEWSLETTERS & ALERTS
Beware: Spoofed Websites Offering Phony CDs
by Howard Haykin
Are you looking to invest in a Certificate of Deposit (“CD”)? They're financial investments that: (i) come with a fixed interest rate and a fixed maturity date; (ii) are commonly sold by banks, thrift institutions and credit unions; and, (iii) are similar to savings accounts in that they are insured “money in the bank” and thus virtually risk free.
Perhaps you've come across websites and emails promoting CDs that …
- Offer interest rates higher than you can find at any other financial institution, with no penalties for early withdrawals;
- Promote only CDs and no other financial products, such as banking or brokerage accounts, loans, or commercial banking services;
- Require high minimum deposits, often $200,000 or more;
- Direct potential investors to wire funds to an account located outside the U.S., or to a U.S.-based account that has a different name than the financial institution claiming to sell the CD;
- Claim that the spoofed financial institution is a member of the Federal Deposit Insurance Corporation (FDIC) member and that deposits are FDIC-insured; and
- Identify “clearing partners” that they claim are registered with the SEC.
If so, be careful, the website you visited may be a fake or “spoofed” website. Website spoofing refers to fake websites that appear convincingly real – that is, they masquerade as legitimate sites by copying the design of a real website, and in some cases utilizing a URL similar to the real site. Cybercriminals use spoofed websites to capture your username and password or to drop malware onto your computer.
BE SKEPTICAL, ASK QUESTIONS. A little homework can go a long ways.
- For advice from the Securities and Exchange Commission (“SEC”) on avoiding phony CDs and steps investors can take to safeguard their CD purchases, click on SEC Investor Alert.
- For advice on “spoofing” and how spoofing works, click on this Malwarebytes article.
- For advice on how to differentiate between real and spoofed websites, click on this psafe.com article.