Investment fraud prevention

Security

Investment fraud

Learn more about this crime, which is becoming increasingly common in Canada.

What is investment fraud?

Investment fraud is a strategy used by fraudsters to convince you to invest your money in no-risk, get-rich-quick schemes.

Common types of investment fraud

Pyramid schemes

Pyramid schemes generate profits by selling products to new clients, who in turn must continue to sell these products to even newer clients. Those at the top of the pyramid are the ones who profit the most from this scam.

Ponzi schemes

Ponzi schemes promise abnormally high returns to new investors. In reality, they use the money of these new investors to provide returns for existing clients. The scheme falls apart when a large number of members want to withdraw their money at the same time.

Here are 3 ways to protect yourself:

Before investing your money, do your research.

Choose the right person

Make sure you're dealing with a person who's registered and works for a well-known company.

Use the Canadian Securities Administrators (CSA) search tool to make sure.

Check registration External link.

Make sure your situation is taken into account

The person you’re dealing with should offer you plans and investments that match your financial goals. You should sign and keep a copy of all documents provided.

Establish trust

Make sure that your advisor answers your questions, has trustworthy references, provides concrete proof and listens to your needs.

Recognize investment fraud

Be extra careful. Here are a few signs to watch out for when receiving investment opportunities:

High returns with no risk

No one can predict the stock market. Be wary of promises of high return with no risk.
For 2022, annual returns between 2.3% and 7.8% are expected, depending on the investment type.

Cash or cheque

Cash and personal cheques are still valid payment methods, but they are sometimes used by fraudsters to get to your money.
Make sure to transfer your assets to a reputable company so you can track your money at all times.

One-of-a-kind opportunity

Fraudsters often use a sense of urgency and privileged information to manipulate their victims into making a decision.
When in doubt, take the time to think it over and don't hesitate to ask for advice.

Are you victim of fraud?

We can help.

See what steps to take

Useful links

5 steps to avoid fraud

External link.

Investment fraud: 6 tips to help you spot the signs

External link.

Learn more about the different types of fraud (Canadian Anti-Fraud Centre)

External link.
  1. According to a joint study by the Institut québécois de planification financière (IQPF – Quebec's financial planning institute) and the FP Canada Standards Council. https://www.iqpf.org/docs/default-source/outils/iqpf-2022-projection-assumption-guidelines.pdfExternal link.