This week’s focus is on investment-style scams.
You work hard for your money—help protect it by confirming any investment opportunity is legitimate. Investment scams can happen in person, over the phone, online, or through the mail. The goal is to persuade someone to invest in what appears to be an established industry, a new opportunity, or a promising sector. In reality, the money is not invested and is taken by the fraudster.
Ponzi schemes involve investments that do not actually exist. Early investors are paid using funds collected from newer investors, creating the illusion of legitimate returns. These schemes collapse when no new investors can be recruited. Fraudsters often promote high returns with little or no risk—an immediate red flag.
Pyramid schemes rely on recruiting new investors to keep the scheme alive. Participants are encouraged to bring in more people, whose money is used to pay earlier participants. As with Ponzi schemes, when recruitment slows, the entire scheme falls apart. Remember: if it sounds too good to be true, it probably is.
Cryptocurrency-related fraud is also on the rise. Cryptocurrency is high-risk and is not regulated in the same way as traditional banking products. Once funds are transferred to another person’s digital wallet, recovering them can be very difficult. The speed at which these funds can move globally can also make investigations more complex.
Real estate scams are another common tactic used by fraudsters. These can include fake rental listings, fraudulent property-investment opportunities, or “sellers” who do not own the property they claim to be offering. Scammers may pressure victims to send deposits or investment funds quickly—before there is time to verify ownership or legitimacy. Confirm property details independently and avoid sending money without appropriate documentation.
Tips to Protect Yourself from Investment Frauds
- Ask questions—and if you’re not satisfied, keep asking.
- Be cautious of high-pressure sales tactics.
- Take your time. Sound investment decisions require thought and consideration.
- Don’t be swayed by appearances or charisma. Focus on the details, not the salesperson.
- Seek guidance from trusted professionals such as lawyers, accountants, or licensed investment advisors.
- Never rely on verbal agreements. Get everything in writing and keep records.
- Check the Alberta Securities Commission (ASC) Investor Alerts to stay informed about current risks.
- Anyone selling securities in Alberta must be registered with the ASC (with very limited exceptions).
To protect yourself from these common scams, stay vigilant—and avoid sharing personal or financial information unless you have independently verified who you are dealing with.
If you believe you’ve been targeted or have sent money, report it as soon as possible to your local police and consider reporting online to the Canadian Anti-Fraud Centre.
Media Contact:
Sgt. Adam Gregory
Medicine Hat Police Service
Community Support Unit
Phone: 403-529-8451