There are many events to attend in Alberta this season, ranging from football games to music festivals and horse-jumping and more. One thing they all have in common (aside from being fun to attend) is that they accept advertising and/or sponsorships from companies in order to finance their events.
Companies purchase advertising for many reasons, including attracting new customers and even new investors. We often talk about victims of investment fraud being approached by phone or online, but victims have been introduced to fraudulent investment opportunities at Alberta events in the past, through solicitation and advertising/sponsorship. It’s important not to give a potential investment more legitimacy than it deserves just because it is associated with an event you enjoy.
Things to remember to avoid getting scammed:
Don’t assume anything – The organizers of a music festival are focused on stage setup - they aren’t required to know securities laws. In an ideal world, the group hosting an event would investigate the business practices of companies before accepting sponsorship from them, but in reality, that’s generally not the case. Don’t assume that just because a legitimate event accepts advertising or sponsorship from a company that the company doing the advertising is legitimate. Even if they are, investing with them may or may not be the right choice for you.
A company that supports the same events you do does not necessarily share your values – It’s great to support and invest in businesses that participate in your community, but just because a company supports a sport or event you believe in does not mean that company exhibits good values. Also, don’t buy into the belief that all scams are big, cosmopolitan endeavours. Frauds can be small and local, so be aware that even events and individuals in small communities can pose a risk. In particular, affinity fraud is a type of scam that deliberately looks to infiltrate tight-knit communities or groups.
Meeting someone in person doesn’t ensure they’re trustworthy – Often, sponsors and advertisers will be in attendance at events. For instance, a company that sponsors a beer garden at an event may have representatives in the tent to talk to those in attendance. If you attend such an event and meet someone offering an investment, that’s not sufficient knowledge to decide to hand over your money. Be sure to do your own research on the person or company, starting with checking to see if they are actually registered to sell investments, and if they’ve had disciplinary action taken against them in the past.
Remember, it’s our job at the Alberta Securities Commission to regulate people and companies offering investments – so contact our Public Inquiries Office toll-free at 1-877-355-0585 or via email at firstname.lastname@example.org with questions you may have about an investment you’re considering. In an interesting coincidence, we share our ‘ASC’ moniker with the Advertising Standards Council – you can direct advertising questions that are not investment-related there.
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