RRSP season: beware of scammers
moneyrelations :: Jan.29.2008
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I’m looking at the calendar and I am reminded that we’re one month away from the 2008 RRSP contribution deadline of February 29th. For Americans, RRSP is our equivalent of your 401k plans.
I plan to max out my contribution limit but since I’m still undecided on how to invest in these volatile markets, I’m going to put the money in a money market fund for now. This just saves me from the pressures of buying something I’ll regret later.
Speaking of pressures, I came across an article in the Sault Star yesterday. Apparently, high pressure tactics are used by scammers on unsuspecting investors who are in a hurry to meet the deadline.
Here are some very surprising statistics from the Ontario Securities Commission (OSC):
One in 20 Canadians is an investment fraud victim, the OSC says. Two in five Canadians have been approached with a potentially fraudulent investment.
About one-third of fraud victims are conned out of less than $1,000. Another third lose between $1,000 and $5,000.
To add insult to injury, 25 per cent of fraud victims are hit up again.
I’m assuming these numbers are not isolated only to the RRSP season but even so, it’s still a high amount. So, despite the “it will never happen to me syndrome”, it is always nice to review material on how to recognize scams.
Here’s my public service announcement of the day courtesy of the OSC – Recognizing Scams:
- Promises of high-return, low-risk investment opportunities
- Unsolicited calls
- Loans to access locked in RRSP funds
- Promotion of offshore tax havens
- Unregistered salesperson
- Offer of free seminars and workshops
- Tax-savings or tax-shelters
- Opportunities to invest in a company that’s about to go public.
- Requests for help in transferring funds
- Unsolicited e-mail messages, also known as “spam”
- Swap worthless stocks for recognised blue chip stocks
- Investment is limited to accredited investors but exceptions will be made for you
- Promise of huge profits with little effort
- Non-disclosure agreements
- Schemes involving recruiting of others
- High-pressure sales tactics
- Requests for personal information
- Company’s purported ‘track record’
- Use of confusing financial jargon
Investing ::
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Good advice, one in twenty does seem like a lot. It’s pretty sad the amount of scammers that are out there, I get emails all the time from people trying to scam me posing as PayPal and Ebay. Like you said we all think it will never happen to us, but it can happen to the best of us if we’re not careful. Thanks for this post, it’s always good to refresh ourselves and to be on the lookout for scams.
Hey Chris,
Yeah, 1 in 20 does seem to be a lot. Not surprised about the 2 in 5 for being exposed to investment scams… We’ve all seen those spam emails.
What’s even worse about this is it’s the seniors who are the most vulnerable due to their age and they might not be able to recover financially in time. While it’s a mixed blessing that they don’t get the Internet spam, it’s also where you and I get most of our information to protect ourselves from these same scammers.