Most of us spend more time researching our next vacation than we do looking carefully at a new investment. And it’s often human nature to not to think about what can go wrong before it does. But the very worst thing that can happen to you, if you want to grow your savings by investing, is to accidentally hand it over to a fraudster whose business is to lie to people and steal their money.
Now that it’s Fraud Prevention Month, we’ve compiled the top 5 warning signs to help you recognize, reject, and report investment fraud.
“No risk investments”
This type of investment is marketed to have a high return with no risks, guaranteed. Reality check: this isn’t possible. Every investment has risk and anyone who tells you otherwise is wrong. Always do a background check on anyone who makes such an offer and report it to the BC Securities Commission at befraudaware.ca.
“Profit like the pros”
This one seems too good to be true, and for good reason too. It’s easy to get excited about a supposedly very special investment that’s only available to a select few. Recognize there’s no such thing and that legitimate investments are not secret.
“It’s offshore, tax free”
This is a big red flag. It’s okay to shelter your taxes, but it’s illegal to dodge them. Offshore is a fancy way of saying your money is going beyond the reach of authorities that can help you
“Get in now”
This one’s a pressure tactic with the goal of persuading you to do something you’re not comfortable with. You’ll be urged to “get in now” before the investment disappears and that it won’t be around for much longer. Remember that it’s ok to take your time to make a decision.
“Your friends and family can’t be wrong”
Sometimes fraudsters target religious, ethnic or tight-knit groups by preying on the trust you place in the people you care about. Never let trust override your common sense and be cautious about every person, no matter how well you know them.
Here’s your takeaway: It’s your money. Learn to protect it. Always ask questions. Do your research. Know your risk tolerance. It’s always okay to say no.