Fraud series: 5 tips to avoid investment fraud

To avoid falling prey to seasoned criminals you must be aware of the way they operate and anticipate their insidious demands.

To better tailor investment fraud to their audience, scam artists closely follow news and economic trends, even using headlines to focus their message. In most cases, brazen criminals use urgency and pressure to lure investors with opportunities to protect themselves from any number of financial risk or economic 'danger'.

To avoid falling prey to seasoned criminals - even those confident enough to allow their phone number to be displayed on your Caller ID screen - you must be aware of the way they operate and anticipate their insidious demands. 

Here are 5 tips you can use and share, because they will not expire:

  1. Never take calls from strangers alerting you to some 'ground floor' opportunity, no matter how it is worded to sound like it's either slightly inconvenient, or too good to be true.
  2. Be vigilant for anything that anyone might be trying to sell you such as incredible opportunities to buy special securities, precious metals or foreign currencies.
  3. Recommendations from friends, family or church groups often lead fraudsters to incredible profits through affinity fraud. By pushing a fraudulent investment to members of groups, sales grow by multiples through the simple psychology that depends on interpersonal trust.
  4. Sounds confusing? Overly technical? Stay away. The opportunity can go to someone else. Con artists often use complex jargon to pull unsuspecting victims into risky investments.
  5. Think you can recognize investment fraud? Take the quiz Name that Fraud. Nothing beats learning by example.
Do not be surprised that suspicious people do not ring your doorbell. Remember that in the digital age, fraudsters will reach out to you via cell phone text messages, social media and even television. Stay vigilant and don't hesitate to report them to the Canadian Anti-Fraud Centre or the RCMP.

About the Author

Claudiu Popa


Highlights

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