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Pattie Lovett-Reid

Chief Financial Commentator, CTV


Unfortunately, investment scams happen. We have all heard stories of people unwittingly losing their money to fraud, leaving them vulnerable and angry in the wake of having their finances compromised. 

When it comes to investing, here a few considerations that can help you protect yourself:

1. If it sounds too good to be true, walk away. If you do not understand the product, walk away. Consider getting a second opinion from a registered advisor, lawyer or accountant, if you are skeptical of an unsolicited investment opportunity.

2. Take all the time you need to make an investment decision. No one should ever force you to invest on the spot. Do your homework and understand what you are investing in. Understand the risks and the fees. Make sure the investment is aligned with your financial goals and fits with other investments you have.

3. Be aware of the advanced fee scheme. You may be persuaded to pay money upfront for an investment that, the seller promises, will yield a significant return down the road. Unfortunately, the scammer takes your money and you never hear from them again.

4. Investment scams happen not only in the movies. They can be pulled off by a team of people who set up fake websites and toll-free numbers, and do their best to make their business look professional and legitimate. Sadly, by the time you realize it’s a hoax, your money is already gone and the scammer will have moved on.

5. Be skeptical of any tax-avoidance schemes. If you are looking for ways to lower your taxes, offshore investing or investing in another country may be tempting. However, be skeptical of any tax-avoidance schemes as you could end up owing the government in back taxes, penalties and additional interest costs.

No question, things can go wrong when it comes to investing, so I always look to the strength of the organization backing my advisor. I want to know that there will be compliance and recourse if I need it.

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