By Mabell, Dave on January 13, 2020.
Investing your money can be one way of preparing for the future. But some people selling those “investments” are dishonest.
Alberta’s securities watchdogs say people who’ve been laid off are proving particularly vulnerable. But Alberta Securities Commission investigators report there’s a number of scams currently trapping would-be investors.
For newly retired or laid-off Albertans, they say, pitches to “cash out your traditional retirement savings” and put the money into something promising higher returns are one of the traps.
“Be wary of any investment promising high returns that are marketed as ‘low risk,'” officials say.
That’s a “red flag of fraud.”
So are claims of an “exclusive opportunity,” some kind of private, high-risk investment promoted as low risk, available for a limited time. The number of complaints related to that kind of promotion is on the rise, officials add.
There’s also been an increase in complaints about “emerging industries,” including cannabis and “cryptoasset” investments, as well as foreign exchange schemes.
“Scam artists capitalize on new and emerging industries, as there is often limited information and history available, making it easier to spread false information,” officials warn.
“While new industries may give rise to a range of exciting investment opportunities, it is important to understand the risks associated with the business before investing your hard-earned money.”
Affinity fraud -“You can trust me” – is also on the rise, particularly in rural Alberta. Churches and religious organizations as well as cultural groups inadvertently provide opportunities for scam artists to work their way into friendship groupings – and use those connections to recruit more “investors.”
“Learn how you can easily recognize affinity fraud in your community, and how to contact the ASC if you see any suspicious activity,” Albertans are advised.
Its website – Checkfirst.ca – offers more information as well as a way to report suspicious promotions.
“Checkfirst.ca provides information on how to detect and avoid investment fraud, recognize the red flags of fraud and report suspicious activities to our public inquiries office,” says Alison Trollope, the commission’s director of investor education and communications.
Investigators say two more issues are being reported. They say some Albertans are being promised higher returns by loaning money through “promissory notes” based on real estate.
Regardless of what the promoter says, officials say, it’s legally considered a security. But if the name of the person loaning the money isn’t registered on the property’s title, then it’s not really secured.
And the commission continues to receive reports of investments being promoted by people not registered with the commission as legally required.
“Generally, anyone offering investments in Alberta must be registered with the ASC, and lack of registration is a key ‘red flag’ of fraud,” officials say
“Yet four in five Albertans do not check the registration of their advisor.”
Anyone, they point out, can determine a person or organization’s status on Checkfirst.ca
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