Montréal – In connection with Fraud Prevention Month, the Autorité des marchés financiers (AMF) is offering consumers of financial products and services a number of tips to protect their savings and investments. "Before making a decision, find out about the financial product. Take the time to invest your hard-earned money wisely," advised Anne-Marie Poitras, Superintendent, AMF Client Services and Compensation.
Ms. Poitras noted that many Quebeckers are regularly exposed to potential financial fraud. In fact, according to a recent survey by the Canadian Securities Administrators (CSA), 3% of Quebeckers reported having been the victim of financial fraud. "Unfortunately, there will always be con artists out there who will use any trick in the book to get their hands on your money. However, there are some very simple ways to identify the warning signs for potential fraud," pointed out Ms. Poitras. For example:
- You're promised high returns, at no risk.
- You don't know, or have only recently met, the people contacting you.
- You're told that the shares of a company will soon be publicly traded and are now available at a discount.
- You're told to act quickly to take advantage of an incredible, once-in-a-lifetime investment opportunity.
- You're pressured into buying and made to feel guilty if you hesitate.
- You're asked to keep the matter secret, since this investment opportunity is being offered only to select individuals such as yourself.
- You're asked to pre-sign forms or a power of attorney.
- You're told that a regulatory agency has "approved" the investment.
According to Ms. Poitras, most con artists will go to great lengths to hide their true intentions. The most astute will find similarities between their situation and yours, will "speak your language," will suddenly show a great deal of interest in you, will brag about their skills and success, will try to make you feel guilty if you question what they tell you, and will refuse to give you time to think before making a decision. "If an investment seems too good to be true, you should ask yourself why a perfect stranger would be offering you this incredible opportunity," said Ms. Poitras.
Ms. Poitras also has some advice for avoiding fraud:
- Never deal with firms and representatives who are not licensed to do business in Québec. Check with the AMF whether they are registered.
- Never make a cheque payable to an individual personally.
- Don't invest if the prospectus or financial statements are not available, even if you are promised that they will be "available soon." You can check this fact with the AMF.
- Don't buy securities based on information obtained only on the Internet.
- Get a second opinion, even if the information comes from someone you know.
- Don't buy a security based on privileged information. That's illegal, and the information is generally not true.
"A con artist usually looks for easy prey. An investor who asks few or no questions makes life easier for a dishonest person. Ask questions and if you don't get clear answers, don't invest," said Ms. Poitras.
As part of Fraud Prevention Month, the AMF has launched a month-long series of awareness and education activities. In addition, investors are encouraged to:
- Visit the consumer section of its website;
- Consult the brochure Watch out for securities fraud;
- Contact the AMF Information Centre.
The Autorité des marchés financiers (AMF) is the regulatory and oversight body for Québec’s financial sector.
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Frédéric Alberro (514) 940-2176
Québec City: 418-525-0337