Staying ahead of investment scams in 2023

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March is Fraud Prevention Month, a time when Albertans are reminded to brush up on their knowledge of investment scams and fraud to better safeguard themselves and those they care for. One of the most prevalent types of fraud is investment scams, which impacts experienced and new investors alike. In a recent study conducted by the ASC, 48% of Albertans believed they had been approached with a potentially fraudulent investment opportunity.

By understanding the tell-tale signs of fraud and remembering the fundamental principles of making suitable investment decisions, Albertans can recognize, avoid and report investment fraud and financial abuse. Remember the following red flags to safeguard your savings or those of someone you care about from an insidious investment scam.

Leveraging fears or anxieties

A go-to tactic for scam artists is tapping into the financial stressors you (their target) may have. This could include the anxiety of not having enough for retirement, leaving a legacy for loved ones or the fear of missing out on great investments. Regardless, be mindful of anyone trying to tap into your fears or anxieties when offering an investment. It is important to pause and do your research before making any investment decisions. Do an online search to see if there are any news articles, social media posts or disciplinary actions taken against the individual or company. Even if the offer isn’t fraudulent, it may not be right for you so it’s important to understand it and its risks.

New friends or love interests taking an interest in your financial wellbeing

As we connect with friends and family and make new friendships, be wary of any new person in your life who takes an immediate interest in your finances. Fraudsters often work hard to establish trust, learn the fears or anxieties you may have, understand how much they can steal and how to manipulate you. Be sure to create boundaries and do not share your personal financial information or anything about your private matters. Also, be mindful of the personal information you share about yourself online – adjust your Facebook, or other social media account settings to “private”, and carefully consider any friend requests. Don’t share personal or financial information with anyone you’ve just met online or in-person unless you can verify their identity and have thoroughly researched any financial offers they’ve given you.

Investment offers from unregistered individuals

By law, anyone selling investments in Alberta should generally be registered with the ASC. Check to see if the firm or individual pitching the investment opportunity is registered by checking the Canadian Securities Administrators’ (CSA) National Registration Search. If the investment offer comes to you from a friend, ask where it originated from and ensure the individual or firm that offered it to your friend is registered. Contact the ASC if you suspect it may be a fraudulent investment or need assistance in confirming registration.

Exclusive offers

Investments promoted as exclusive offers just to you is a clear red flag of fraud. Scam artists often try to take advantage of those interested in investing by promoting opportunities to “get in early,” or claiming that unless you move fast, you are going to miss out on the latest trend or great “opportunity” to make money. Exclusive or time-sensitive offers drive false urgency and prevent you from researching and talking to others about the investment. Investments will always be available, and no credible financial advisor should ever rush you into a decision.

Growing your investor knowledge can help you recognize, avoid and report investment fraud. If you are interested in learning more about how to stay safe and protect yourself from fraud, consider attending a virtual or in-person Fraud Prevention Month event. If you are interested in attending a free event this month, please visit our events page.

If you feel you or someone you care for may be involved in an investment scam, do not let the embarrassment or fear keep you from speaking up. You can contact or file a complaint with the ASC or call us toll-free at 1-877-355-4488.

Keeping romance scams out of your online social and dating life

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For many in today’s increasingly connected online world, using apps and social platforms to connect with others has become convenient and common. As of 2021, eHarmony, a popular online dating platform, reported that 36% of Canadians use online dating platforms. Unfortunately, with the popularity of dating apps and social media, fraudsters are increasingly using them to scam Canadians. According to data from the Canadian Anti-Fraud Centre, romance and investment scams were among the country’s top forms of fraud. Last year alone, Albertans lost $4.5 million dollars to romance-related scams. Fortunately, there are steps you can take to safeguard your personal information and recognize, avoid and report these types of scams.

What are online investment and romance scams?

One of the go-to tactics of fraudsters is to tailor their scams to potential victims. Social media platforms can offer a wealth of valuable information – public profiles or posts can share insights into your location, interests, friends, and family members, all of which can help the fraudster craft a convincing and tangible story around their scam. Fraudsters can even impersonate someone the victim trusts, such as a friend or family member, to offer investment opportunities. In a 2020 Investor Index conducted by the Canadian Securities Administrators, 1 in 4 Canadians stated that they were more likely to trust an investment opportunity if it was recommended by someone they knew. In addition to social media, scammers patrol online groups and dating sites, seeking to establish trusting friendships or romantic relationships with potential victims to manipulate them into investing in a scam. They may pressure individuals to invest, guarantee high returns with little risk, and even convince the victim to continue investing over time, leading to substantial losses.

Protecting your social media profiles from investment fraud and romance scams

There are steps you can take today to protect yourself from investment and romance scams on social media and dating apps.

  1. Limit the amount of publicly available information about yourself online. This can be done by adjusting your privacy settings on these platforms.
  2. Be highly skeptical of unsolicited investment offers, especially from those you have just met.
  3. If an offer comes from a friend, family member or someone you trust, consider checking the offer’s legitimacy by contacting the individual by phone or in-person.
  4. Watch for the most common red flags of fraud, including pressure to invest, guarantees of high returns, and investment offers in cryptocurrencies.
  5. Do not take up investment offers from someone not registered with the Alberta Securities Commission.

While social media and dating apps have made it easier for individuals to connect, they also provide opportunities for scammers to target unsuspecting victims. By being aware of the tactics used by scammers and taking steps to keep your personal information private, you can better protect yourself from falling victim to online investment and romance scams.

ASC highlights top investment risks for 2023

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The Alberta Securities Commission (ASC) has compiled a list of the top investment risks and potential scams to watch out for in 2023, based on investor complaints, ongoing investigations, and current enforcement trends.

1. Advice from fraudulent “finfluencers”

Many people look to social media for “how-to” information, and that includes when it comes to finding information about investing. There is an increasing trend of “finfluencers” on social media. These financial influencers use their large social media followings to discuss trends and share advice on topics related to finance and investing.

Some fraudsters act as finfluencers to purposefully promote deceitful investment information through schemes like:

  • Touting: promoting an investment without disclosing compensation
  • Scalping: promoting a stock to quickly drive up the price and then selling at the inflated price

Investors should exercise caution when considering investments promoted as a sure thing. And do thorough research on the company, offer and all parties involved before investing in anything promoted on social media.

Where can you go for information? Start with a Google search about the company and offer. Even if the offer isn’t fraudulent, it may not be right for you. It’s important to fully understand anything you’re investing in.

2. New (fake) friend alert

Any investor should be cautious of new friends offering investment opportunities, particularly related to cryptocurrency or forex trading. Fraudsters often use apps and social networking sites to build relationships and establish trust with strangers, before tailoring an investment scam to their needs and encouraging them to invest increasing amounts of money through professional-looking websites. Victims some times see early returns, but these are designed to create a false sense of credibility. Eventually, the victim can no longer access the website or withdraw their money and the fraudster gives excuses or stops communication altogether.

Always be cautious about sharing any personal information online or in person. Always take time to consider the source of the information and research the opportunity on your own or in consultation with a registered investment advisor.

3. Impersonating a regulatory agent

Investors should be aware of fraudsters impersonating regulatory agents. These fraudsters may pretend to be staff from the ASC or another regulatory agency, using the agency’s logo, name, picture, credentials and social media accounts. When impersonating a legitimate staff member they pressure investors into providing personal information or transferring money. It’s important to always verify the identity of the source and remember that the ASC will never request that an individual transfer money to the organization or to any staff member. To verify the legitimacy of a request, investors can check verified ASC social media accounts on our website and contact the ASC’s public inquiries office to confirm the legitimacy of any request they receive allegedly from the ASC.

4. Spoofed Websites

There is a growing trend of spoofed websites that imitate legitimate investment firms. Often these sites offer unrealistic rates of return. These sites can appear in internet searches alongside legitimate firms and often claim to be “registered with the CSA” or authorized to sell investments in Canada. To protect yourself, always check the registration of any advisor or organization. To learn how to spot the red flags of fake websites, visit the interactive SpotTheSpoof.ca website brought to you by the ASC.

5. Celebrity endorsements

Be cautious of celebrity endorsements for investment opportunities. While it’s common for legitimate businesses to use celebrities to endorse their products, fraudsters do as well. When you see a celebrity promoting an investment, it’s important to remember that they may be being paid to do so with little to no understanding of the investment they are promoting or their image might be being used without their knowledge or consent. Fraudsters will often mimic celebrity personas, adopt similar social media handles, create cloned websites, and manipulate quotes and images to make the endorsement appear genuine. Investors should be cautious of any investment opportunity that is promoted by a celebrity.

As the new year gets underway, it’s a good time to review your investing goals and brush up on your knowledge to protect yourself from scams. Always be vigilant for red flags of fraud and thoroughly research any investment before making a decision. If you suspect any suspicious investment offers, report them immediately to the ASC’s public inquiries office. To keep up to date throughout the year, consider signing up for the ASC’s Investor Newsletter.

Attack of the clones: Five steps to staying vigilant against fake websites and investment scams

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In today’s ever-evolving online world, we have become used to the convenience and intuitive experiences available through the internet. While these technological improvements have been game-changers in our daily lives, scam artists are increasingly taking advantage of our comfort and compliancy online to target us with websites impersonating legitimately registered banks and brokerage firms.

The act of “Cloning” or “Spoofing” is when fraudsters create fake websites that mimic a legitimate company’s website and information, often unbeknownst to them. These websites can even utilize the actual address and employee names from the legitimate company and can be promoted online through pop-up ads or found through search engine results.

Before you consider conducting financial or investing activities online, follow these key steps to avoid cloned websites and scams.

1. Avoid investments offered online or found through search engine results – Investment offers promoted through pop-up ads or found on search engine results can be fake. Be skeptical of promised attractive investment returns and take the time to do your research into the investment. Contact the bank or firm in the ad or search result using their legitimate phone number or website address listed on their registration found on the Alberta Securities Commissions registration list for Alberta-based firms and institutions and the Canadian Securities Adminstrators National Registration Search for those based in another province or territory in Canada. By law, firms and individuals offering investments to you must be registered in the province you live in.

2. Pay attention to the details – Before you provide any information, money, or log in to the website, review and make sure you have spelled the website URL correctly. If you found the website online or through an ad, pay attention to oddities, including spelling and grammatical mistakes, incorrect area codes, odd logos, stock photos, and chat functions requesting personal information such as an email address.

3.  Be wary of unusual forms of payment – Fraudsters may try and correspond with you over social media like WhatsApp for the investment offer or request payment with cryptocurrency or wire transfers. These are red flags of fraud and legitimate investments are never conducted over social media and typically do not require payment in digital assets or wire transfers.

4. Be cautious of fraudsters posing as representatives – Fraudsters may impersonate actual investment professionals, using their names, job titles, and even fraudulent credentials to offer various financial products and services over the phone and online. To further enhance this deception, fraudsters will even falsify documents, including particular statements or trade commissions and may even direct victims to check the firm’s registration or incorporation details. While the legitimate bank or firm is registered, you are not talking to an actual representative employed by them. Compare the website’s contact details with the contact details listed on the registration for the firm on the ASC registration list or CSA National Registration Search and contact the number listed in its registration to verify that you’re talking to a real representative.

5. Report recovery room scams – Fraudsters often target and contact those who have lost money with an investment scam, claiming that they will be able to retrieve their money for a fee. They may also claim there is a technical issue or tax fee and request more money from the victim to retrieve their funds. If you are contacted by someone offering to recover your investments or money, keep all records of communication with the individual and report it to the ASC.

Fraudsters are continually looking for new ways to deceive and imitate the registered banks and brokerage firms online. By staying vigilant and following the steps above, you can confidently recognize, avoid and report bad actors.

Investment fraud prevention: Tips for staying safe in a post-pandemic world

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Over the past year Albertans of all ages experienced social isolation and felt the effects of loneliness. The good news is that with the creation and widespread distribution of vaccines, we should soon be able to reconnect in person with loved ones and friends. As we move towards these opportunities to reconnect, it is important to be mindful of the connections we re-establish and the new friendships we make.

As they always do with global events and trends, fraudsters capitalized on the pandemic to attempt to sell their investment scams (often related to the fight against COVID-19). They marketed their scams heavily through email, social media and online forums like Facebook groups in lieu of in-person interactions. These digital avenues will continue to be popular, but with the eventual reopening of in-person activities, fraudsters will again try to prey on the perceived vulnerability of seniors.

In a recent study conducted by the ASC, 54% of Albertans aged 45-64 believed they had been approached with a potentially fraudulent investment opportunity. By understanding the tell-tale signs of fraud and remembering the fundamental principles to making wise financial decisions, older Albertans and their caregivers can recognize, avoid and report investment fraud and financial abuse. Remember the following tips to safeguard your retirement savings or those of someone you care about.

Leveraging fears or anxieties: A go-to tactic of every scam artist is tapping into the financial stressors their targets may have. This could include having enough for retirement, leaving a legacy for loved ones or the fear of missing out on great investments as the economy reopens. Regardless, keep an eye out for anyone trying to tap into your fears or anxieties when offering an investment and do not share your personal financial information with new acquaintances.

New friends taking an immediate interest in your financial wellbeing: As we start to reconnect with friends and family and make new friendships, be wary of any new person in your life who takes an immediate interest in your finances. Fraudsters do this to establish trust, learn the fears or anxieties you may have, understand how much they can steal and how to manipulate you. Be sure to create boundaries for your personal finances and private matters.

Investment offers from unregistered individuals: By law, anyone selling investments in Alberta should generally be registered with the Alberta Securities Commission (ASC). You can check by visiting CheckFirst.ca or by contacting the ASC. If the investment offer comes to you from a friend, inquire where it originated from and ensure the individual or firm that offered it to your friend is registered. Contact the ASC if you suspect it may be a fraudulent investment or need assistance in confirming registration.

Exclusive offers: Investments promoted as exclusive offers just to you is a clear red flag of fraud. Fraudsters utilize this tactic to drive false urgency and prevent you from researching and talking to others about the investment. Investments will always be available, and no credible financial advisor should ever rush you to a decision.

The reopening of Alberta is an exciting time for everyone, but remember that bad actors will look for ways to use in-person opportunities and friendships to promote their scams. By staying mindful of these tips, older Albertans and those who care for them can enjoy making up for lost time and avoid fraud.

If you feel you or someone you care for may be involved in an investment scam, do not let the embarrassment or fear keep you from speaking up. You can contact or file a complaint with the ASC at www.albertasecurities.com or call us toll-free at 1-877-355-4488.

 

2021 Top Investment Risks

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The year 2020 will long be remembered for its challenges. Global crises, like the COVID-19 pandemic, can create great investment opportunities, but can also create emotional and stressful situations that are often exploited by fraudsters looking to scam you out of your hard-earned money. As you consider your financial planning for the year ahead, it’s important that you research any investment to ensure it’s right for you and have the information necessary to protect yourself from the common tricks of scam artists.

To inform and help empower you to make the right investment choices and to protect yourself, the Alberta Securities Commission (ASC) released its list of the top investment risks and possible scams to look out for in 2021. This list is based on investor complaints, ongoing investigations and current enforcement trends.

1. Investments related to COVID-19

A common scam is a pump and dump scheme, where fraudsters promote the opportunity to invest in new products or services to (in the case of COVID-19) aid in the battle against the pandemic. In reality, their claims are false and misleading. After they have heavily promoted (“pumped”) the “opportunity” and the stock prices get artificially inflated, the fraudsters “dump” their stock at the high price, leaving investors with nothing once the truth is revealed and the price of the stock falls dramatically. When investing, do your own homework and carefully research the company and the investment. Make sure you are comfortable with the risk associated with the investment you are considering.

2. New and emerging industries

New and emerging trends/industries make it easier for fraudsters to build investment scams and promote them with false information. There is usually limited information surrounding emerging industries and plenty of hype and excitement for their future potential. So while the new industry may be legitimate, be wary of anyone offering you an investment that seems to have vague or confusing details and sounds too good to be true.

3. Great expectations

Be wary of high-risk investment opportunities, especially if they promise high returns resulting from a proposed deal involving a letter of intent. Proposed deals can fall through, so if it’s being promoted as a sure thing, you should be wary. Before you invest, research the company, the deal and the parties involved. Even if it’s not fraudulent, make sure you’re comfortable with the risks associated with the investment.

4. Affinity fraud

Affinity fraud occurs when victims are introduced to scams by someone they know, such as family members, friends or co-workers. Fraudsters often target ethnic communities, religious organizations, social clubs or professional groups. They pretend to be part of the community and take advantage of the trust and relationships that exist within. They often flaunt their success or wealth and use unsuspecting people to promote the scam to others who trust them. Even if you trust the person encouraging you to invest, protect yourself by researching the person and/or company selling the investment, and make sure they are registered to sell it.

5. Non-registered people selling investments

Generally anyone selling investments in Alberta must be registered with the ASC and lack of registration is a key red flag of fraud. Be sure to check the registration of any adviser or organization and be wary of anyone who tells you that registration isn’t required for the products being offered.

6. Fraudulent ads to work from home as a day trader

Ads that claim you can make good money by working from home as a day trader are popping up more frequently. They say no experience is necessary and all you need to do is pay a fee for the training. However, often, the firms offering these services are not legitimate and the goal is to steal the money you paid as a “fee”. It’s important to remember that, to trade securities, you need to be registered. Also, trading stocks or foreign-exchange is inherently high-risk and complicated.

Protect yourself in 2021. Do your research. Keep an eye open for the red flags of fraud and report any suspicious investments to the ASC’s public inquiries office. The free resources on CheckFirst.ca will help you stay informed, and the new Fraudster’s Playbook “Don’t be Fooled by Fraud” outlines steps that scam artist take so you can recognize and avoid them.

Keeping your money safe while investing

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Investing can be part of a healthy financial future, enabling you to grow your money for retirement and financial goals like vacations or your child’s education costs. Making sure any investment opportunity fits in your financial plan or goals is important.  So is protecting yourself from market manipulation or investment fraud.

In a recent study by the Alberta Securities Commission (ASC), 1 in 4 Albertans believed they were approached with a possible fraudulent investment. As COVID-19 continues to affect our lives, associated scams have emerged as fraudsters try to exploit the crisis to profit from Albertan’s fears and misinformation. While the look of a scam may vary, fraudsters follow a series of steps that are easy to identify if you know what to look for. To understand those seven steps, the ASC created a new resource entitled “Don’t be fooled by fraud”.  It outlines the steps fraudster’s take, in addition to providing information on how to avoid a scam and protect yourself.

Step One:  Identifying a potential victim

A fraudster’s first step is to identify targets. They leverage current events like a pandemic or economic downturn and source vulnerable investors with common anxieties or fears about their money.

Step Two: Befriend and earn trust

Once fraudsters have found suitable targets, they move quickly to cultivate friendships and gain trust. They often do this through community groups, organizations, online groups and through your friends or family to establish themselves as a reliable resource and authority.

Step Three: Showcase the benefits of investing

As the targets become trusting, the fraudster will flaunt their wealth and success to establish credibility. They will casually mention the investment opportunity that brought them this wealth, telling them that it came at little to no risk.

Step Four: Offer the investment

With the potential target’s trust in place and the perceived credibility of his investor savviness solidified, fraudsters move fast to offer the “investment opportunity”. To ensure targets quickly buy-in and do little or no research, they will sell it as an exclusive or time-sensitive offer, private deal and promise high returns with little to no risk.

Step Five: Receiving money for the investment

Leading up to receiving money, fraudsters will inundate targets frequently with communication, provide confusing and complex paperwork to establish legitimacy, and highlight the urgency of buying-in as soon as possible.

Step Six: Disappear (the Ghosting Act)

Once the target “invests”, fraudsters reassure the victim of the investment opportunity and even request more funds for a bigger payout. Following this, they will delay access to funds and eventually disappear and ignore the target when the scam can no longer be hidden.

Step Seven: Target the victim again ( the Recovery Act)

Fraudsters are hardly finished once a scam is complete. They will often sell the victim’s information to another fraudster or criminal organization, which will contact the victim acting as a credible agency that can reclaim their investment for a fee. This is ultimately another scam in which the victim is robbed again in their attempts to get their money back.

Understanding these seven steps is important so that you can recognize unsafe situations you or someone you know could be in. To learn more, read the fraudsters playbook entitled “Don’t be fooled by fraud”, accessible for free at www.checkfirst.ca/playbook. While visiting checkfirst, check out the other information and resources designed to help you increase your investing knowledge and keep your money safe when considering any investment.

Connecting with the seniors in your life about investment fraud

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Current pandemic measures have dramatically changed how we interact with our friends and family. While physical distancing affects everyone, seniors are experiencing increased isolation and loneliness as friends and family are unable to visit in person.

Unfortunately, fraudsters see this as a prime opportunity to become a “trusted” friend in a senior’s life so they can take advantage of them or their retirement nest egg through fraudulent scams or unsuitable investments. Scammers use a variety of methods to target seniors, including emails, mail, phone calls and even in-home visits.

The danger of financial abuse is real. In a 2020 study conducted by the Alberta Securities Commission one third of Albertans 55-plus believe they’ve been approached with a potentially fraudulent investment scam through a co-worker, family member, friend or even a member from a club, group or organization they belong to.

Fraudsters use a variety of tactics to defraud seniors, including:

  • Leveraging their trust and politeness to establish friendships quickly.
  • Instilling fear that they will run out of money in retirement and burden their family.
  • Exploiting current events like the pandemic to offer fake investments in cures and new technologies.
  • Using high-pressure sales tactics.
  • Promising high returns with little or no risk and exclusive opportunities.
  • Unsolicited investment opportunities and friend requests through Facebook and social media.

How can you help protect seniors in your life from investment fraud?

You can help protect your friends and family from investment fraud with open communication about their daily lives and financial decisions. Calling them routinely can help reduce social isolation and disrupt any suspicious activity that might be happening. If you believe someone you know might be at risk, be proactive and do the following:

  • Bring up the topic of investment fraud. Share the dangers of investment fraud during this time and send them information specifically created for seniors.
  • Listen and be engaged. Be open to discussing issues or topics regarding their finances and help them check the registration and history of any individual or firm offering them an investment opportunity.
  • Pay attention to their social circles. Have they been mentioning a new friend or someone who has started providing them advice, financial or otherwise? Ask questions respectfully and monitor any ongoing suspicious activities.

 

If you suspect you or someone in your life may be involved in a potentially fraudulent investment scheme find help and more information at checkfirst.ca.

 

 

 

Scams exploiting fears and isolation of older Albertans amid COVID-19

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The COVID-19 pandemic has impacted lives around the world, including families across Alberta and especially seniors, who are isolated from support groups. The recent volatility of the markets, coupled with potentially lost retirement savings and social isolation, has created an environment of fear, uncertainty and vulnerability. Unfortunately, this is exactly the environment that scam artists prey upon.

As COVID-19 continues to spread, associated scams are emerging as scam artists exploit the crisis to profit from people’s fears, uncertainties and misinformation.

There are many types of fraud popping up during COVID-19. One example includes phishing and malware scams where scammers pose as governmental agencies, national or global health authorities, and send phishing emails or texts designed to trick people into downloading malware or providing personal identification and financial information. They can appear to be real, but err on the side of caution and think carefully before providing anyone with this information.

Another common scam are pump-and-dump schemes involving publicly traded small “shell” companies. Scam artists will ‘pump’ up the company’s value by enticing investors to purchase stock with inflated or false claims, then quickly ‘dump’ their stock before the hype ends. This results in a substantial payout for the scam artist while all the remaining investors lose their money. Often pump-and-dump schemes can be related to companies claiming to have products or services that will prevent, detect or cure COVID-19 infection. Be cautious of any claims that a company has a solution to help stop the coronavirus outbreak.

There are multiple ways that scam artists will target an individual. According to a 2020 study conducted by the Alberta Securities Commission (ASC), some of the most common ways Albertans 55+ years of age believed they were approached with a potentially fraudulent investment scam were:

  • Through a friend, neighbour, co-worker or family member, or from a member of a club, group or organization they belong to (32%)
  • By a stranger calling over the telephone (22%)
  • From email spam (23%)

When considering investing in any opportunity, always read the fine print and research the investment – no matter how the opportunity was presented to you. Keep in mind that fraudsters often exploit the latest crisis with the COVID-19 outbreak being no different. Don’t be lured in by promises of easy returns – more likely you’ll be asked for money upfront that you’ll never see again. Also remember that anyone selling investments needs to be registered with provincial securities regulators to do so. For more information on how to recognize and avoid these scams and to check the registration of any individual or firm offering you an investment opportunity, visit the Alberta Securities Commission’s website: Checkfirst.ca.

 

Five tips to avoid the dangers of affinity fraud

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Many don’t realize this, but one in four Albertans are approached with fraudulent investment opportunities through friends and family – people we trust. According to the Alberta Securities Commission (ASC),  this type of scam is called affinity fraud and almost always involves either a fake investment or one where the scammer lies about the critical details, such as the risk of losing money or where the money is going. With affinity fraud, scam artists often target organized groups such as community clubs, religious organizations, immigrant communities, seniors’ homes and professional associations.

While members of these groups are sometimes fully aware of their intent to deceive, other times they are unknowingly involved. And often, you may not realize that what you are putting your money into is considered a ‘security’. Fraudulent investments take on many forms –  from shares to promissory notes, units, trades, or some other creative monetary term. No matter what it is called, securities laws apply whenever you are giving someone money with the expectation of a return or payment. It is critical, therefore, that you know how to protect yourself from investment fraud no matter the source.

This type of fraud is identifiable and avoidable. By following this checklist, you could help to save yourself or a loved one time, money and heartache:

 

Never rely solely on referrals from friends and family members.

If they have failed to do their research and invested in a scam, they may unknowingly lead you down the same path.

If it sounds too good to be true, it is.

Don’t be drawn in by promises of spectacular returns and low risk; these are classic warning signs of fraud.

Don’t be pressured into making a decision.

Take your time to understand the business and the risks involved. Scam artists will pressure you into making a quick decision. They are doing so to exploit your fear of missing out on a “valuable” and “time-sensitive opportunity” — and to limit the amount of research you conduct.

Be wary of investments offering little information.

If you are being offered an investment and the promoter “doesn’t have time” to provide details or you are told to keep the opportunity confidential, this could be a warning sign.

Check the salesperson’s background.

Anyone offering securities in Alberta generally must be registered with the ASC. The ASC can also tell you if the salesperson has ever been subject to enforcement action.

 

Many people who fall victim to affinity fraud fail to report it because they feel ashamed, embarrassed or want to protect their friend or loved one. This enables other people to fall victim to the same scam and makes prevention difficult. If you suspect you or someone you know has been approached with a potentially fraudulent investment scheme, you can find help and more information about the red flags of investment fraud at checkfirst.ca or contact the ASC at 1-877-355-4488.