4 ways to avoid investment scams

1. Get a second opinion

Be skeptical of unsolicited investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition opportunities – over the phone, online or from acquaintances. Before you investInvest To use money for the purpose of making more money by making an investment. Often involves risk.+ read full definition, get a second opinion from a registered, qualified advisor, a lawyer or an accountant.

2. Check registration

Generally, anyone selling securities or offering investment advice must be registered with their provincial securities regulatorSecurities regulator A government agency that enforces the securities act in jurisdiction it has authority over. This act is made up of laws that establish rules for issuing and trading securities. The Ontario Securities Commission is the securities regulator for Ontario.+ read full definition. Check registrationRegistration A requirement for any person or company trading investments or providing advice in Canada. Securities industry professionals are required to register with the securities regulator in each province or territory where they do business.+ read full definition through the Ontario Securities Commission or Canadian Securities Administrators.

3. Take the time you need

Be suspicious of time-limited offers and high-pressure salespeople. If the investment is legitimate, you should not have to invest on the spot. Take the time you need to make an informed decision.

4. Research the investment

Before you make any investment, understand how it works, the risks and any fees. Make sure it fits with your financial goals and your other investments.

Choose your investments – don’t let them choose you

If you have a financial plan, you can evaluate any new opportunities in relation to your plan. You’ll be more likely to choose appropriate investments if you consider how they fit with your goals and risk tolerance.

Take action

Read the Little Black Book of Scams from the Competition Bureau to help protect yourself against fraud.

Key points

To avoid investment scams:

  1. Get a second opinion
  2. Check registration
  3. Take your time
  4. Research the investment
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