Typical Financial Scams

Promises of big returns without any risk can lure unsuspecting investors into fraudulent schemes designed to part you from your money. Avoid scams.

Professional fraudsters go where the money is. That means investors like you. If you don’t recognize the signs, they can steal your money and you can’t always get it back. Think twice if you receive this sales pitch:

  • Guaranteed high returns – no risk!
  • Insider Tips – get in now!
  • Offshore investment – tax free!
  • Profit like the experts!
  • Great investment opportunity – your friends and family can’t be wrong!

You may hear these promises at a meeting. More and more, they are coming through phone calls, email or on the Internet.

Investors over 50 and Fraud: If you are 50 or older, you are particularly vulnerable to fraud artists. They know you have savings and that you are concerned about paying for retirement. So, watch out.

When you are older, you tend to have more savings, assets, and disposable income compared with the general population. However, you have less time and fewer resources to recover any losses.

Today, people close to retirement face a unique burden. On top of preparing for retirement, many are still financially responsible for dependent children. Some also find themselves financially responsible for aging parents who didn’t save enough for their own retirement. This has many pre-retirees worried about not having enough money to last them through retirement.

Scam artists prey on that fear by promising high-return, low-risk investments. In reality, these investments are usually high-risk products that are not right for people looking to protect their nest eggs as they approach retirement—if the investment exists at all. Either way, you could lose some or all of your money. With little time to recover from the losses, many victims find their retirement plans shattered.

How CIRO can help

CIRO has a number of resources to assist seniors in making informed and safe investment decisions. We offer several brochures that address the types of information your advisor is required to request, how to make a complaint about your advisor or investment dealer and how CIRO regulation bolsters investor protection. The Investors section of the CIRO website explains options on arbitration and how to get your money back. Seniors can also use the CSA’s National Registration Search to check an advisors registration. They can then use our investment dealer AdvisorReport service to review the services their investment dealer advisors are registered to provide, as well as check their educational and disciplinary records.

More Resources from the Canadian Securities Administrators and provincial securities commissions

Getting Help with your complaint

If you suspect a registered investment advisor has breached the rules, CIRO wants to know. We`re committed to responding to client complaints in a timely, helpful and fair fashion. We encourage investors to bring their complaints to our attention so that we can take appropriate regulatory action where warranted. You can make a complaint or ask questions by phone, online or by mail or fax.

To make a complaint now, visit the Making a Complaint section.

Canadian Investor Protection Fund

In the unlikely event your investment firm becomes insolvent, you may be eligible for compensation from the Canadian Investor Protection Fund (CIPF). The members of this fund are dealer firms regulated by CIRO. CIPF will ensure the securities, cash and other property that are held in your account are returned to you in accordance with its Coverage Policy.

Scams and fraud involving the Internet

All the same devices and apps that make it easier for you to get information also make it easier for scam artists target you. Text messages or social media postings that promise quick dollars are favourite ways that fraudsters lure youth.

Think you’re too smart to fall for a scam? Fraudsters are very good at luring investors of any age. Watch out for emails or texts that say you have won a contest or warn there is a problem with your bank account, investment account or credit card. They ask for your account or credit card number or bank PIN number. If you provide it, fraudsters can wipe out your accounts or put you in debt. More and more, fraud artists are using the Internet and social networking to promote the same old get rich quick schemes. You need to recognize them.

Download the Investment fraud on the Internet (PDF) brochure from the CSA.

How to Report Fraud

Not all scams deal with investments. Find out about other types of scams and how to report them. If you believe you have fallen victim to fraud, report it. Investors have some protection and timely warnings can help other people avoid trouble. Victims have the right to complain.

In some cases, you may be eligible for compensation. Reporting suspected fraud also helps regulators and police locate and investigate fraud. Read more at the Government of Canada’s Anti-Fraud Centre.