Investment fraud can happen to anyone. Learn how to protect yourself from becoming a victim: know how to spot the red flags of fraud, understand what common scams look like and keep up to date on investment alerts. Explore this section to find out more about how to keep your money safe.

Understanding fraud and the many red flags of fraud can help protect you from being scammed.

How to protect yourself

Follow these steps to better protect yourself against investment fraud:

1. Determine whether the person or company soliciting you is registered.
2. Find out whether the investment adviser or firm has been disciplined in Manitoba or nationally.
3. Find out whether the person, company or investment product has been the subject of a cease trade order.
4. Read up on Investor Alerts.
5. Never give out personal or sensitive information online or over the phone.
6. Never send money offshore, wire money or give your credit card number to make an investment purchase.
7. Do not interact with people you do not know who have contacted you out of the blue.

Scam artists have an arsenal of tricks to get you to part with your hard-earned money. Watch for these warning signs:

• Low-risk investments with high returns. Any investment that looks too good to be true probably is. High returns are normally an indication that the investment is high-risk.
• Pressure to make a quick decision. Investing your money is a serious decision and should always be done with time and consideration. Scam artists don’t want to give you enough time to figure out their game.
• “Insider” information. If an investment adviser is giving out “confidential” investment advice, they may actually be deceiving you or their employer. Both put you at risk. It is illegal to knowingly trade based on inside information.
• Investment offers from complete strangers. If you engage with someone you do not know who has approached you out of the blue offering an investment you know nothing about, you significantly increase your risk of becoming a victim. If an investment is worth your money, your registered investment adviser will be aware of it and will be able to help you decide whether to invest.
• Unregistered salespeople. If the person selling the investment is not registered to do business in Manitoba, you should question whether they’re authorized to sell investments at all. To verify that a person is licensed and registered to sell securities, contact the Manitoba Securities Commission.
• Anti-establishment sentiment. Any individual who encourages you to subvert the government or avoid financial institutions is most likely trying to keep their illegal activities from being tracked.
• Exclusive offers for wealthy people. Be wary of investments allegedly intended for the super-rich but are being offered to the average investor.
• Cutting out the paper trail. Without receipts for investment purchases, statements, a prospectus, fund facts or Know Your Client forms, a scam artist can easily take your money without being detected.
• Overly complicated investments. Honest investment advisers are able to make investing your money relatively simple and straightforward. You should always understand where your money is going and how it’s being invested.
• Avoiding questions. If the person selling you the investment doesn’t answer your direct questions, they’re probably trying to keep you from seeing the truth. A legitimate investment adviser has nothing to hide.

Created in partnership with the Winnipeg Police Service, recognizeinvestmentfraud.com is an excellent resource for Manitobans to identify and protect against common types of fraud.

Canadian research suggests that 4–10% of older Manitobans will experience some form of abuse in their later years. The most common type of abuse is financial abuse—the illegal or inappropriate use of a person’s money or property. These guides will help you recognize and avoid frauds and scams targeting seniors.

• Seniors
• Seniors Fraud
• Seniors ABC
• Scam Artists Pursue Adults over 50

The Internet is a quick and easy way for scam artists to find potential victims for their investment scams. With the Internet, fraudsters can operate anonymously from anywhere in the world, making them hard to catch.

Investing Internet Brochure

A typical approach

A team of scam artists sets up a makeshift office, called a boiler room, and works in stages. They might use a phony survey to find out about your investment experience, offer you free research or try to get information such as your mailing address, phone number and email address.

Boiler Room Brochure

Question:
I think I may be the victim of an investment scam. What should I do now?

Answer:
Contact the MSC at 1-855-FRAUD-MB or 1-855-372-8362 and ask to speak with an investigator. It is important to report investment fraud as soon as you become aware of it. It could save you from additional losses and help protect your friends and neighbours from becoming victims.

Question:
Are there investment fraud red flags I should watch for?

Answer:
The following are common red flags of investment fraud:

• Unregistered salespeople. If the person selling the investment is not registered to do business in Manitoba, you should question whether they’re authorized to sell investments at all.
• Low-risk investments with high returns. Any investment that looks too good to be true probably is. High returns are normally an indication that the investment is high-risk.
• Pressure to make a quick decision. Investing your money is a serious decision and should always be done with time and consideration. Scam artists don’t want to give you enough time to figure out their game.
• “Insider” information. If an investment adviser is giving out “confidential” investment advice, they may actually be deceiving you or their employer. Both put you at risk. It is illegal to knowingly trade based on inside information.

For more detailed information on avoiding frauds and scams visit recognizeinvestmentfraud.com.