Don’t invest in fraud: know how to spot investment scams
The Competition Bureau and the Ontario Securities Commission (OSC) are helping Canadians recognize and avoid fraudulent investment opportunities
March 14, 2017 – OTTAWA, ON / TORONTO, ON
This Fraud Prevention Month and throughout the year, it’s important that even the savviest investors are wary of opportunities that are just too good to be true.
Investment fraud is a deceptive practice where investors and companies are encouraged to make investment decisions based on false information. This type of fraud not only impacts your finances, it can affect relationships, your mental, physical and emotional health and your quality of life.
Here are four signs that an investment opportunity may be fraudulent:
You can make a lot of money with little or no risk
In general, higher-risk investments offer higher potential returns, and lower-risk investments offer lower potential returns. This is known as the risk-return relationship. When you buy investments like stocks, there’s no guarantee you’ll make money. And the risk of losing money increases with the potential return. So, if you’re promised high returns, with little risk, think twice.
You get a hot tip or insider information
The sources of “hot tips” or “insider information” may not have your best interests in mind. Think about why they’re offering you tips, and how they benefit by telling you about them. If the hot tip is false, you may lose your money if you act on it. If it is really insider information about a public company, it may be illegal to act on it.
You feel pressured to make a decision
Scammers frequently use high-pressure tactics – because they want to get your money and then move on to other victims. If you’re asked to make a decision right away, or are presented with a limited time offer, it’s likely not in your best interests. Scammers know that if you have time to check things out, you may not fall for their scam.
The seller isn’t registered with the provincial securities regulator
Before you make a decision, check the registration and background of the person offering you the investment. In general, anyone selling securities or offering investment advice must be registered with their provincial securities regulator. To check registration, visit CheckBeforeYouInvest.ca
The Competition Bureau and the OSC have a long-standing working relationship and mutual interest in protecting Canadians from fraudulent business practices while working to foster fairness, innovation and confidence in the marketplace.
“The Bureau and the Ontario Securities Commission work together to empower Canadians with the knowledge they need to make informed purchasing and investment decisions. Fraud prevention is vital to ensuring that consumers benefit from a fair and innovative marketplace, and we will not hesitate to take action against scammers looking to defraud investors of their hard earned money.”
Assistant Deputy Commissioner, Competition Bureau
“Protecting investors from fraudulent practices is a critical part of the OSC’s mandate – investment fraud hurts all of us by threatening the trust people have in our markets. This Fraud Prevention Month, we are pleased to partner with the Bureau to help Canadians recognize and avoid investment scams.”
Executive Director and Chief Administrative Officer, Ontario Securities Commission
In 2014, the Bureau and the OSC signed a Memorandum of Understanding aimed at developing a framework for cooperation that will assist in the effective delivery of each agency’s mandate.
Since that time, the Bureau and the OSC have assisted one another in investigations, litigation and other enforcement actions.
The Bureau and the OSC have also undertaken joint education or advocacy initiatives aimed at preventing Canadians from becoming the victims of fraud, including regular participation in fraud chats on Twitter.
There are a number of planned educational opportunities to help investors recognize scams during Fraud Prevention Month. Follow the Bureau, the OSC Investor Office and #FPM2017 on Twitter to read about upcoming events in March and join the #Fraudchat conversations.
- Watch the Bureau and OSC’s video on Investment Scams.
- View the Competition Bureau’s videos on the various scams found in The Little Black Book of Scams.
- Embed a digital fact card about investment fraud on your website.
- Register to attend an OSC in the Community seminar or teletownhall on investment fraud.
- Visit the Fraud Prevention section of the Competition Bureau’s website for more information on fighting fraud.
For media enquiries, please contact:
Competition Bureau – Media Relations
Ontario Securities Commission – Media Relations
For general enquiries, please contact:
Toll free: 1-800-348-5358
TTY (hearing impaired): 1‑866‑694‑8389
OSC Contact Centre
Toll free: 1-877-785-1555
The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.
The OSC is an independent Crown corporation that is responsible for regulating the capital markets in Ontario. The OSC’s statutory mandate is to provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets and confidence in capital markets. The OSC’s powers are derived from the Securities Act (Ontario), the Commodity Futures Act (Ontario) and certain provisions of the Business Corporations Act.
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