Beware

Each year thousands of people -- the majority being seniors -- become victims of con-artists who promise above average returns from investments. These scam organisers frequently search for victims in community or special interest groups and on the Internet. Then they target those who lack investment knowledge and are dissatisfied with the returns from their current investments.

Most investment con-artists are well-dressed, smooth talking and confident. They often use complex words to confuse their victims and make themselves sound like experts.

Some common investment scams to watch for are:

• Prime Bank Schemes - Investors are promised large returns for investing with a con-artist who claims to be a representative from a prestigious bank or international institution, such as the International Chamber of Commerce (ICC). The con-artist takes the money and disappears.
• Investment Seminars - These expensive seminars promise advice on how to invest, but are usually schemes to sell the presenter's books or tapes, and collect admittance fees.
• Offshore Investing - The scam artist lures potential investors with the promise of making more money and avoiding taxes through investing in banks from another country. Those who fall victim to this scam are often guilty of attempted tax evasion and end up losing all their invested money.
• LIRA Scams - The con-artist promises early access to a Locked-In Retirement Account (LIRA) by encouraging the investor to liquidate the funds and purchase shares in a start-up company chosen by the scam promoter.

Be Wise

• Learn about the different types of investment frauds.
• Avoid selecting a financial advisor who is a complete stranger. If possible, choose one recommended by a friend or family member. If this isn't possible, contact the Manitoba Securities Commission (204-945-2548) for a list of registered advisors.
• Find out an advisor's fees and commissions, as well as how long the advisor has been practising.
• Always take notes of every meeting or conversation with a financial advisor. Include date and time of contact and the representative's name.
• Never accept a verbal contract or agreement. Always get written documentation.
• If the written documentation is unclear, don't depend on the advisor to explain the terms. Get a second opinion, preferably from a lawyer.
• Don't rush when making a financial decision.
• Ask questions about anything that doesn't make sense. Make sure the questions are answered.
• Find another representative if a current advisor refuses to answer questions or becomes rude and intimidating.

Be wary of financial advisors who:

• guarantee a high return with no risk
• promise a full investment refund
• request pre-signing of blank forms
• are reluctant to offer written documentation about the investment
• insist on the signing of a non-disclosure agreement or demand secrecy
• claim to possess "inside information"
• offer investments where information about them can only be found on the Internet
• use high pressure sale tactics