Smart Cookie Fraud Detective – How Spot a Fraudster
March is Fraud Awareness month and a great time of year to put on our Smart Cookie detective hats and be aware of ways to protect our money and avoid investment fraud. For those Smart Cookies looking to score a free ipad check out the BC Securities Commission’s Contest aimed at educating investors on the signs of investment fraud.
So keep your investments safe this year and be on the lookout for the following:
1. Anyone offering no risk investment: There’s no such thing as a guaranteed investment – the higher the returns, the higher the risk.
2. The chance to profit like the pros: Often pitched as opportunities known only to a select few, fraudsters convince investors that they have access to inside information or the chance to benefit from a higher than normal return.
3. Offshore and tax free opportunities: Fraudsters often try to convince investors to move their money outside Canada to avoid taxes. This poses the risk that they will in fact move it to an off shore bank account from which it will never return.
4. Time sensitive opportunities: Placing pressure on an investor to make a quick decision is a tactic often used in investment fraud. The rush to jump on an opportunity that the general public doesn’t have is likely too good to be true.
5. Friends and family connections: Scam artists target religious, ethnic, or close-knit groups by working their way into organizations and befriending members. This approach relies on the trust investors place in the people they care about.
This video is a great example of how a fraudster operates.
