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Beware of Promises Too Good to be True!

by Patricia Bowles, Director of Communications & Education, British Columbia Securities Commission 

Almost everyone knows this saying.  But we hear over and over again that people lose money when they fall for a scam promising high returns with low or no risk. There is no such thing.   If the investment promises high returns, then it is also promising high risks – meaning you can lose all of your money.

The new 2009 Investor Index tells us that 4% of Canadians have invested money in what turned out to be an investment fraud. One of the more surprising statistics in this year’s survey says that 38% of British Columbians are approached for a fraudulent investment.  That’s 10% higher than the national average.

It also tells us that people can be approached by strangers, either on the phone or at the door, through the internet, by going to a seminar, through advertisements in the paper, on the radio or TV, or through family and friends.

If you are approached for an investment opportunity, do us a favour. Go to InvestRight.org and check out Protect Your Money. Watch and listen to each of the four modules.  It provides investors with checklists and tips to evaluate and research investment opportunities for risks and potential fraud. It tells you how to report a fraud, how to share the information with friends and family. Get a second opinion.  Ask an accountant or banker to look at the opportunity.  Do your research.  Check to see if the advisor is registered or has ever been disciplined by a securities regulator.  Simply Google the person’s name.

When it comes to money, make your decision after you have done your research.  The worst thing you can do is make an impulsive decision on the spot and write a cheque.

You can call us at 1-800-373-6393.

Patricia Bowles, Director of Communications & Education

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