If you have an email address, your spam box is likely filled with sweet offers of insider trading tips or propositions of no-strings attached foreign wealth from diplomat’s daughters trying to “escape” corrupt regimes.
If you’re chuckling at these references, chances are you haven’t fallen for one of these mediocre efforts. But the truth is, more sophisticated financial frauds and scams are going on at this moment.
So in honour of “2 Good 2 Be True” day – where Canadians are encouraged to talk about fraud on Twitter using the #2good2Btrue hashtag – John Webster, President of Queensbury Securities, shares some wisdom on spotting and avoiding fraud.
“The most important thing is to ensure that the dealer is registered,” says Webster. “A lot of the big scams where individuals lose money, the advisor that they’re dealing with are not actually registered, they’re not associated with a dealer or they’re not licensed to provide advice.”
Vet Your Advisor
Finding a registered advisor improves your chance of recovering money lost in a scam via the Canadian Investor Protection Fund or the Investment Protection Corporation.
“If the investment is made through a registered dealer then the investor is protected,” adds Webster.
But it goes beyond just asking the dealer if they’re protected – he advises following up on the association website to make sure both the dealer and advisor are actually registered.
When it comes to finding out if a dealer has your individual interests in mind, that’s a different story, says Webster adding that there’s no real way to check.
You can check for different accreditations the advisor might have but “it certainly doesn’t assure good advice.”
Dad Doesn’t Always Know Best
Referrals by friends and family can help you find a good financial advisor, but take them with a grain of salt and research their accreditations as your friends and family may also be victims of fraud.
“That’s the way fraudsters operate they have to take out their friends and family as well to gain that credibility with the victims,” adds Webster
Stay On Top Of Your Statements
The signs of fraud could be in front of your nose – should you choose to read them. It’s for this reason that Canadians should always open, and read, their banking statements.
“I regularly see situations where the victim goes ‘I didn’t know what was going on or I didn’t open my mail’,” says Webster. “Take a second to check your statements and say does this seem reasonable.”
Most advisors whether for insurance or investments, issue reports quarterly.
“If there’s a discrepancy on your statement – query the advisor,” says Webster. “If you’re still not satisfied – ask to speak with the branch manager.”
Protect Yourself From Fraud
In addition to joining the Twitter discussion The Financial Consumer Agency of Canada has released a list of it’s own to protect yourself from scams.
- Don’t share personal information freely
- Destroy documents with personal information
- Keep your wallet or purse safe
- Don’t carry ID you don’t need, such as your Social Insurance Number (SIN)
- Lock your household mailbox if possible
- Check your credit report once a year (you can order it for free from the two credit reporting agencies)
- Make sure websites are secure before transmitting personal information.
- Delete emails that ask for personal information
- Keep computer firewalls and spyware filters up to date
- Keep your computer passwords in a safe place
- Be skeptical—if an offer sounds too good to be true, it probably is!
- Save paper bank records for at least a year in a safe place