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Famous people are often used to promote products and services or to help raise awareness for events or special causes. Increasingly, some celebrities are endorsing investments or products marketed as investments. More recently, many celebrities have begun promoting crypto assets and NFTs (non-fungible tokens).
A celebrity could be an athlete, an actor, a singer or a YouTube personality or social media influencer. You may have seen celebrities endorsing investment products on social media, online ads or television.
There are two reasons it can be risky to follow celebrity endorsements:
- The celebrity may not have the financial expertise or qualifications to endorse a specific product.
- The celebrity may not be endorsing the investment at all, but an impostor is using their name or image to gain credibility.
If you’re considering an investment endorsed by a celebrity
Ask yourself, would you still be interested in the investment if a celebrity wasn’t promoting it?
A celebrity endorsement does not mean guaranteed investment returns — all investments have risks associated with them. As with any investment, research the company and product before making a decision.
Focus on deciding whether the investment is right for your investing goals, not on the fame and excitement surrounding the celebrity.
Fraudsters may try to capitalize on celebrity
Fraudsters may hope a celebrity’s fame and recognition will entice you to buy the product or service they’re endorsing. These types of scams can happen online or through social media accounts.
Keep in mind, sometimes, a celebrity’s image may be used in an endorsement without their knowledge or permission. Or a fraudster could impersonate a celebrity.
Protect yourself from fraudulent encounters by taking steps such as:
- Speaking with a trusted advisor or family member before sending money.
- Being cautious of high-pressure sales tactics.
- Not sending money or gift cards to someone you haven’t met.
The OSC warned investors about Kevin O’Leary’s image being used to promote get rich schemes in 2017. Representatives for the Canadian businessman and reality TV host confirmed he did not approve the use of his image in any advertisements or news articles involving binary options trading software and platforms.
3 things you can do to keep your money safe
1. Find out if they are registered
In Ontario, any business or person selling investments or giving investment advice must be registered with the Ontario Securities Commission. Registration helps protect you from unqualified investment professionals.
Visit CheckBeforeYouInvest.ca for more information and to check the registration of a business or person.
2. Get unbiased information from a trusted source
Learn more about the investment from other, unbiased sources, such as GetSmarterAboutMoney.ca. Our free resources and tools can help you get started with investing and financial planning.
It’s important to know how to recognize and avoid investment fraud. If there’s a chance it is a fraud or scam, it can be difficult to get your money back.
3. What to do if you have questions or suspect investment fraud
Contact the OSC Inquiries and Contact Centre with your questions about investing, or any concerns or complaints you have about celebrity endorsements and investments.
If you suspect fraud, contact us immediately. Call toll-free at 1-877-785-1555 or email firstname.lastname@example.org.
As an investor, it’s important to ask yourself whether an investment product or service really fits your financial goals and whether the person selling the investment is registered to do so.
Remember, making an investing decision based solely on a celebrity endorsement is extremely risky. In many cases, the endorsed investment may actually be a scam