How to check an investment offer before you send money

The short answer

Before you send money, check three things. Use websites and phone numbers you look up yourself, not links or numbers the seller gives you.

The seller. Search the person's name and the firm's name in the free background check on Investor.gov, run by the U.S. Securities and Exchange Commission (SEC). It takes you to the SEC's adviser database or to BrokerCheck, run by FINRA, the industry regulator for brokerage firms. In California, you can also call the Department of Financial Protection and Innovation (DFPI) at 1-866-275-2677. If you find no record, or the record does not match what you were told, stop.
The investment. Securities, such as stocks, bonds and many notes, must be registered with the SEC or qualify for a legal exemption. Look the company up in the SEC's EDGAR database, or call the SEC at 1-800-732-0330. A "registration certificate" or a Form D filing does not mean the SEC approved anything.
The payment. Stop if you hear promises of guaranteed returns, feel pressure to hurry or keep it secret, or are asked to pay in crypto, with gift cards, by wire to another country or into someone's personal account. Stop too if you are told to pay a fee or "tax" before you can withdraw.

Already sent money? Contact your bank, card company, payment app or crypto exchange right away. Stop paying, save every record, and report it to the FBI's Internet Crime Complaint Center (IC3) and the SEC. In California, report it to DFPI too. Anyone who asks for money upfront to recover your losses is probably running a second scam.

Why checking first matters

In its 2025 annual report, IC3 counted about $8.6 billion in reported losses from investment fraud. That was more than any other type of complaint. Crypto investment fraud alone made up about $7.2 billion. Across all types of complaints, California had more complaints and higher reported losses than any other state. These figures count only what people reported to the FBI.

Speed matters because money is hard to get back once it moves. Investor.gov warns that money wired outside the United States for a scam investment is probably gone for good.

Check 1: Is the seller registered for what they are selling?

Different products have different regulators, so match the product to the right lookup.

If you are offered…	The seller should usually appear in…
Stocks, bonds or funds through a brokerage	FINRA BrokerCheck
Investment advice for a fee	The SEC's Investment Adviser Public Disclosure database (IAPD). It covers advisers registered with the SEC or with a state
Futures, commodities or foreign-currency (forex) trading	The National Futures Association's BASIC search. It shows registration with the Commodity Futures Trading Commission (CFTC), NFA membership and futures-related actions
A fixed or fixed indexed annuity	Your state insurance regulator. In California, use the Department of Insurance license check, which shows license status and discipline history
A variable annuity	Both an insurance license and securities registration, because it is an insurance product and a security registered with the SEC
A crypto platform or crypto ATM serving Californians	DFPI (see Check 5)

You do not have to work out which database to use first. The Investor.gov background check sends a name to IAPD, and it sends you to BrokerCheck when that is the right place.

What to read in a record:

Current registration. Is the person registered now, and with the firm they say they work for?
Employment history. BrokerCheck shows the past 10 years, including jobs outside the industry.
Disclosures. These include customer disputes, disciplinary actions, and certain criminal and financial matters. Some may still be pending or unproven, so read the details instead of just counting them.

No record means no money. Investor.gov notes that much U.S. investment fraud is committed by people who are not licensed or registered. A record also does not make an offer safe. Registration is not an endorsement. The SEC does not issue registration certificates, and a Form D filing (a notice some private offerings file) does not show that anyone is registered or approved.

In California, DFPI oversees broker-dealers, investment advisers and the offer and sale of securities. It also takes complaints about people working without a required license. You can search its Regulated Entities List, or call 1-866-275-2677. DFPI says it can help callers in more than 240 languages through a translation service.

Check 2: Make sure the person contacting you is the person in the record

Scammers copy real firms. They build profiles and websites with a real company's logo and a real employee's name. DFPI has issued many alerts about websites posing as licensed California investment advisers and broker-dealers.

Contact the firm yourself. Search the firm on Investor.gov, choose "Get Details," and open its Relationship Summary (Form CRS). Use the phone number or website listed there, not the one in the message you received.
Check anyone who claims to be a regulator. People pose as SEC staff, and some make up regulators that do not exist. To check, call the SEC at 1-800-732-0330 or its staff locator at 202-551-6000. The SEC also keeps a public warning list called PAUSE. It names entities that falsely claim to be registered, pose as real firms, or cite fake agencies. A name missing from any warning list proves nothing.

Check 3: Look up the investment itself

Investor.gov suggests five questions before you invest. Is the seller licensed? Is the investment registered? How do the risks compare with the possible rewards? Do you understand it? Where can you turn for help?

Search the company in EDGAR, the SEC's free database of company filings. Investor.gov calls a company that is not registered with the SEC a possible red flag.
Ask for the offering documents in writing, such as a prospectus or other disclosure document, and read them before you pay. Reluctance to put details in writing is a warning sign.
Be careful with promissory notes (a written promise to repay with interest) sold to ordinary investors. Investor.gov says these are often scams. Notes are usually securities, so both the note and the seller should check out.
Apply Investor.gov's plain rule: "Never invest in something you don't understand."

Check 4: Test the promises

Regulators list these warning signs:

Guaranteed or "risk-free" returns, or returns far above what insured savings pay
Steady gains no matter what the markets do
Pressure to act now, or a "once-in-a-lifetime" or "ground floor" chance
Requests to keep it secret
"Everyone is buying it," testimonials, or a celebrity or influencer endorsement
An "AI trading system" that supposedly cannot lose
A strategy the seller cannot or will not explain
An offer that came to you unasked, by call, text, social media or group chat

Any one of these is a reason to stop and check before you pay.

Check 5: Look hard at how you are asked to pay

Investor.gov treats these payment requests as red flags: paying by credit card or gift card, wiring money to another country, or paying into a personal account. In relationship scams, people are often told to buy crypto, sometimes at a bitcoin ATM. They think they are investing, but the money goes to accounts or wallets the scammers control.

The clearest signal comes later. If you are told to pay a fee, commission or "tax" before you can withdraw, it is advance-fee fraud. Investor.gov notes that victims often pay more trying to unlock an account than they first put in.

In California, the Digital Financial Assets Law has required many crypto businesses that serve Californians, including crypto ATM (kiosk) operators, to have a DFPI license since July 1, 2026. Businesses that filed a complete application by that date may keep operating while DFPI reviews it. DFPI's guidance also limits a kiosk to $1,000 a day to or from one customer, and caps kiosk fees at $5 or 15 percent of the transaction, whichever is greater. Before you use a crypto platform, ask DFPI whether it is licensed or has applied.

Schemes going around now, and the check that exposes each one

Scheme	How it usually goes	What exposes it
Relationship ("pig butchering") scam	A "wrong number" text, dating-app match or group chat turns into weeks of friendly or romantic messages, and then an investing tip	Check whether the contact is registered and the platform licensed. Any fee to withdraw means stop
Fake trading website or app	A polished app shows your balance climbing, but withdrawals are blocked	Investor.gov warns that being in a major app store does not prove an app is legitimate. Search the platform's name in DFPI's Crypto Scam Tracker
Affinity fraud	Someone from your faith, language, cultural or veterans' community brings it, and respected leaders vouch for it	Check the person and the investment even when you trust who brought it
Health-breakthrough pitch	A company says its product prevents, detects or cures a disease, and its stock or notes will soar, or an "investment" will pay for medical care	Check EDGAR and the seller. The SEC has suspended trading in companies that made these claims. The FDA can tell you whether a product is actually approved
Ponzi or "high-yield" program	Smooth returns, then delayed payouts and an offer of higher returns if you stay in	The investment is not registered. Statements have errors. Withdrawals are hard

Two cautions. First, a name that is missing from the Crypto Scam Tracker proves nothing. Its entries come from consumer complaints, and DFPI says it has not verified the losses reported. Second, many victims do not know they are victims yet. In 2025, the FBI contacted 3,780 people who were losing money to crypto investment fraud, and 78 percent did not know they were being scammed.

For health claims tied to a product, how to spot and avoid health misinformation covers the warning signs, such as one product that claims to treat many unrelated conditions.

Example (fictional): Dolores, a retired bus dispatcher, gets a text meant for "Amy." The friendly stranger who sent it keeps chatting for a month. Then he shows her his gains on a crypto trading app. Dolores deposits $3,000 and watches it "grow" to $9,000. When she tries to withdraw, the app asks for a 20 percent "tax" first. She stops and checks. The man's name is not in BrokerCheck or IAPD, the app's name appears in DFPI's tracker, and DFPI's phone line has no record of the platform. She sends nothing more, calls the exchange where she bought the crypto, and files reports with IC3 and DFPI.

If you already sent money

Stop paying. Do not pay any fee, tax or "release" charge to withdraw.
Call the company that moved your money, now. Tell your bank, credit union, card issuer, payment app, wire service, or crypto exchange or ATM operator that it was a fraudulent transaction, and ask them to reverse it. The Federal Trade Commission (FTC) notes that crypto payments lack the protections cards have, so recovery can be hard. Ask anyway.
Save the evidence. IC3 asks for crypto wallet addresses, transaction IDs, amounts, dates, the names, phone numbers and emails used, the websites or apps involved, the exchanges you used, and a timeline of what happened. If you are missing some details, report anyway.
Report it.

Watch for the second scam. IC3 does not work with private law firms or crypto "recovery" services, and it will never contact you for money or information. Investor.gov's advice is that harmed investors should never pay upfront to recover an investment.
Secure your accounts if you shared passwords, codes or personal details. Verify before you pay walks through fraud alerts, credit freezes and identity-theft reporting.
Know what to expect. Investor.gov notes that not every harmed investor recovers money, and those who do may get much less than they lost. A securities attorney can explain your legal options. A tax professional can tell you whether a loss affects your taxes.

If you are helping an older relative: FINRA's Securities Helpline for Seniors is 1-844-574-3577 (weekdays, 9 a.m. to 5 p.m. Eastern). The U.S. Department of Justice's National Elder Fraud Hotline, 1-833-372-8311, assigns a case manager to people age 60 and older. Its lines are open weekdays, 10 a.m. to 6 p.m. Eastern, and it has help in Spanish and other languages. Scammers have impersonated this hotline, so call it yourself. In California, Adult Protective Services serves adults 60 and older and dependent adults 18 to 59 with disabilities. Call 1-833-401-0832, any time, and enter a ZIP code to reach the county office. Brokerage firms also ask customers to name a "trusted contact person" the firm can call if it suspects exploitation. That person cannot make trades or decisions on the account.

Get help now

Losing savings to a scam can be crushing. The FBI reported referring 38 of the victims it contacted in 2025 for suicide intervention. If you or someone you know is thinking about suicide, call or text 988, or chat at chat.988lifeline.org. It is free, confidential and open 24 hours a day. If someone is in immediate danger, call 911. When to seek urgent mental-health assistance describes warning signs to watch for.

This page is general education, not individual financial or legal advice. Before you make a decision about your own money, talk with your state securities regulator, a registered professional you have checked yourself, or an attorney.

Sources

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