November 29th, 2020

Tips to help avoid investment fraud


By Sulz, Dave on October 30, 2020.

LETHBRIDGE HERALD

“If you know the enemy and know yourself, you need not fear the result of a hundred battles.”

So said Sun Tzu, a Chinese general and philosopher, in “The Art of War,” an influential book about military strategy.

Fast forward 2,500 years and the Alberta Securities Commission has provided a resource to help Albertans know a particular kind of enemy: fraudsters.

The ASC has created a “Fraudster’s Playbook,” titled “Don’t be Fooled by Fraud,” which gives Albertans insight into the seven key steps a fraudster takes to implement a scam, and provides action consumers can take at any stage to protect themselves:

The fraudsters’ steps include:

– Step 1: Identify potential victim(s) for the scam;

– Step 2: Befriend and earn trust;

– Step 3: Drop hints or showcase the benefit of an “investment” opportunity;

– Step 4: Offer the investment opportunity;

– Step 5: Receive money for the investment;

– Step 6: Disappear (the Ghosting Act);

– Step 7: Target the victim again (the Recovery Act).

“Typically, our studies show that one in four Albertans believe they may have been approached with a possible fraudulent investment,” Hilary McMeekin, ASC’s Director of Communications and Investor Education, said in a news release. “This is of great concern. The amount of money you can lose to fraud can be everything you have – and more, if you borrow money from the bank or against your home to make that investment. Additionally, scam artists prey on those that are vulnerable, which is particularly true when we are going through an economic downturn or pandemic. Albertans need to be extra vigilant at times like these.”

The ASC points out that anyone can be impacted by fraud, and the ASC has seen investment fraud strike every demographic and age group (young and old, rich or less well-off) and geographic area in Alberta.

Beyond the playbook, Albertans can increase their financial knowledge around investing by utilizing the free, unbiased resources on the Checkfirst (https://checkfirst.ca) and ASC (www.albertasecurities.com) websites. There is also a Playbook Quiz for Albertans to use to see if they can recognize a fraudster’s tricks, which can be found on the website landing page (https://checkfirst.ca/resources/fraudsters-playbook/).

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Rosaline

Before you start investing, decide on your financial goals. At this stage, it is important to prioritize and evaluate the value of your desires. HCR Wealth Advisors can always help you with your goals. As a rule, investments require some initial savings. Deductions from wages can be a great way. By saving just 10%, you can accumulate enough money to enter the stock market within a year.



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