Top five ways to avoid getting burned at your next BBQ It’s that time of year again. Warm weather typically leads to invitations for outdoor gatherings of friends, family and business associates. While light conversation is the norm at these events, they can also be the perfect breeding ground for affinity fraud and investment scams. When talk turns to investing, make sure you’re prepared. Here is a list of the top five ways to make sure you don’t get burned at your next BBQ: - Ask questions. Don’t be afraid to ask for more information about an investment. For instance, if promised amazing returns, ask what these rates are based on. Ask why they are interested in you as an investor and why they think this investment is the right one for you. If you don’t like what they’re saying, move on.
- Beware of “referral programs”. Many scams depend upon word of mouth promotion. You might hear: “Ask us how you can become part of our referral program” or you may be asked to “promote the investment opportunity to personal friends and business associates.” Beware of this, as the company may be taking advantage of your pre-existing relationships with others to sell their investment. This is called “affinity fraud”.
- Be cautious with trends. An investment may seem appealing if you think you are getting in on an opportunity before it catches on. Examples of this could be green investments, “new” energy technologies or simply a company that misrepresents its growth or records of returns. Don’t rely on hype. Do some online research and check it out.
- Don’t feel pressured. Be prepared that some companies or individuals may try to get you to sign up for an investment on the spot. Or, they may not sell to you right then and there, but instead will suggest that you meet for a follow-up chat. Both of these situations can catch you off guard if you’re not prepared.
- Do your homework. Don’t become a victim. Make sure you take to time to check first and do some research on the company or individuals selling you an investment before you invest.
Don’t let the excitement of an event and the people around you overshadow your own judgement. Take some time to think about what you’ve been offered and do some research before you hand over your money. Contact the ASC at inquiries@asc.ca or toll free at 1-877-355-4488 to find out more about a company or individual offering you an investment.
Comment on this blog... | About this Blog We’ve created this blog to present you with answers to some of the more popular questions we receive from investors. We'll have different subject matter experts blogging about what they know best and we'll update it as new blogs arise. We hope you'll find it interesting and helpful. Today's Blogger Hello, Don Rodgers here and I am the Public Information Officer for the Alberta Securities Commission (ASC). Before coming to work for the ASC, I was a trader and taught technical analysis. I also wrote for two on-line investment websites. As such, I have a great deal of interest in the securities industry and a desire to help answer questions which you may have. Here are some links I think you’ll find helpful:
Ask your question If you have a question you would like to see answered on this page, email them to questions@asc.ca. We may not use every question we receive but will concentrate on areas from which we receive the most inquiries. If you have a question related directly to your own situation, please contact ASC inquiries using our toll free number (1-877-355-4488) or email inquiries@asc.ca. If you have a complaint, email complaints@asc.ca or call 403-355-3888.
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