The red flags of investment fraud help to decrease your chances of becoming scammed out of your hard-earned money.
Although the warning signs may seem like common sense, many suspicious signs are actually missed or ignored frequently by investors who become victims.
If any of these red flags sound familiar, the investment you’re contemplating could be a fraud.
Be leery if the investment seller mentions the following:
• No or low-risk opportunity with high returns. Usually, the higher the returns, the higher the risk.
• Buy now! 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 background research you conduct.
• Profit from “insider” information. These scams are pitched as opportunities known only to a select few who are said to be making a lot of money. This might include an invitation to a seminar where salespeople make misleading claims about a secret or exclusive technique for building wealth.
• “Tax free” offshore investments. You can defer paying taxes (sometimes), but you can never avoid them. When money is being invested offshore into a fraudulent opportunity, it may be difficult, if not impossible, to get your money back.
• Your friends can’t be wrong about a great investment opportunity. People you trust may unknowingly be advising you to invest in a fraudulent deal (this is called affinity fraud). No matter who recommends the opportunity, always do your own research before investing.
In order to avoid becoming a victim of investment fraud, you need to do your homework. To sell securities legally in Alberta, for instance, an individual or company must be registered with the Alberta Securities Commission.You can do a quick and free registration check by going to www.checkfirst.ca or by contacting the Alberta Securities Commission directly. It is always advisable to consult a third party who has no involvement in the deal such as a lawyer or accountant for a second opinion. If you suspect you are involved in or are aware of a potentially fraudulent investment scheme, contact 1-877-355-4488 or e-mail firstname.lastname@example.org.
– News Canada
Posted: Jan 5, 2016