With the RRSP season approaching, Scotiabank warns that it’s a good idea to keep a look out for consumer investment scams, so it has compiled a list of some of the more common scams.
“We try to remind people that if an offer sounds too good to be true, it usually is,” said Bruce Armstrong, VP Financial Planning, Scotiabank. “We know how important it is to protect hard earned investments, which is why the more people know about consumer fraud, the less likely they are to become victims”.
Some common investment scams to be aware of include: prime bank schemes, spam e-mails/Internet fraud, and phone fraud.
Prime bank schemes sometimes claim affiliations with major international institutions, which are false. Investors are promised above average returns completely risk free, and little or no information is provided to investors about the specifics of the investment.
Scotiabank offers these prevention tips to share with investors:
- Be aware of unsolicited email or telephone calls. Only deal with people you know and are comfortable with.
- If you receive an unsolicited email message offering investment advice, ask yourself why you received the message and why the person who sent it is trying to remain anonymous. Do your own research and be wary of acting on rumors.
- Don’t believe any promise of great profits at no risk. No investment can deliver high guaranteed profits at no risk.
- Don’t believe in claims of inside information. Some terms to be aware of include: “pending announcement”, “the CEO told me in confidence”, and/or “future earnings”. Any person who has access to such information and offers advice in this form is breaking the law.
- Be aware of anyone who asks for money up front or who does not provide you with enough time to think about the offer.