NASHVILLE – The Tennessee Department of Commerce & Insurance’s (TDCI) Division of Securities encourages investors to learn the red flags about mobile investment app scams before they make an investment or share any of their personal information.

Mobile apps are a convenient and inexpensive alternative to consulting with an investment professional. In fact, investors are increasingly seeking mobile apps for investment advice and opportunities. Unfortunately, investors who rely on a mobile app put them at risk of potentially receiving unsuitable services or misinformation.

“While the majority of apps offer legitimate information and investments, unscrupulous individuals can easily create a platform that promotes unregistered securities and advertise it as a safe, legitimate opportunity,” said TDCI Commissioner Carter Lawrence. “Investors who have questions about an app or an investment should always feel free to contact our Securities team with their questions.”

In general, apps that provide investment services must be registered with federal, provincial and/or state securities regulators and investors are encouraged to check the registration status of the app’s underlying entity.

"Using an unregistered investment app potentially puts an investor’s financial security and personal information at risk,” said TDCI Assistant Commissioner for Securities Elizabeth Bowling. “We encourage investors to always conduct their research on the security that’s being offered and the entity offering it.”

Investors who have questions about an app or investment should contact TDCI’s Securities Division at tn.gov/commerce/securities or 800-863-9117.

To help investors, TDCI is sharing the following information.

Mobile Investment App Red flags

• An app guarantees high percentage returns on investments.
• An investing app has no ratings/reviews, or it has negative ratings/reviews.
• An app advertises investment opportunities as risk-free, low risk, or guaranteed.
• An investing app promotes itself as an opportunity to earn passive income or offers referral bonuses to get others involved.
• There is online discussion about the app causing investor losses or being an investment scam.

How to protect yourself

• Check before you invest. Research the product and the person offering it to ensure they are both registered. Do not be fooled by a promoter who says they are registered; anyone can claim to be registered without actually possessing the credentials.
• Do not assume an app is trustworthy just because it exists on a mainstream app store or is promoted on social media.
• Consider consulting with a registered investment professional. Relying solely on apps for investment advice can be very risky.
• Do your own research before committing money to any investment opportunity.
• Ask the right questions. Just because an app is highly rated doesn’t mean it is safe. It is still important to contact your state or provincial securities regulator to check if it is registered.

To learn more tips about mobile investment apps, visit our latest blog post here. 

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