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Labour unions, associations could be fraud targets

The Nova Scotia Securities Commission urges local union members to be on the lookout for affinity fraud. Affinity fraud occurs when an investment promoter plays upon the fact that they share something in common with a potential investor – such as attending the same place of worship, being a member of the same race or ethnic group, or working in the same profession. Investors are more likely to trust this type of salesperson. But after lowering their guard and giving their money to a promoter, they can end up losing their entire investment. “Many investors fall prey to promoters who may seem to share your values and life experiences,” said Natalie MacLellan, Investor Education Coordinator with the Commission. “But no matter who is promoting an investment opportunity, you should protect yourself by maintaining your skepticism and investigating before investing your money.” The Commission urges investors to not be taken in by testimonials from other group members who express enthusiasm for an investment’s success. “While early investors may receive returns on their investments, scam artists frequently use money from later investors to pay high returns to early investors. Those who invest at the later stages of the scam often lose all the money they thought they were investing.” MacLellan encourages investors to be leery about promises of “guaranteed” investments since all investments involve risk. In addition, she said investors should be very skeptical when high rates of return are promised, especially when few investments are earning high returns. “Affinity fraud are some of the saddest cases that we see,” said MacLellan, “because people not only lose their money but they’ve been betrayed by someone they trusted.” Before considering an investment, investors should (at minimum) check if the salesperson is registered to sell securities in Nova Scotia, and if the security has been properly registered with the Commission. Conduct a background check. Visit www.beforeyouinvest.ca for detailed instructions on how to check your adviser’s registration, investigate a firm or investment, and file a complaint. Labour unions, professional associations and other workplace organizations offer many professional benefits, but members Should be wary of infiltration by con artists. Like churches, cultural organizations and any organized group, unions may be targeted with affinity fraud schemes. Affinity fraud occurs when an investment promoter plays upon the fact that they share something in common with a potential investor – such as attending the same place of worship, being a member of the same race or ethnic group, or working in the same profession. They will infiltrate a group, make friends and gain trust – or they will target a group member to do their scamming for them. Investors are more likely to trust a salesperson who seems to have something in common with them, someone who shares the same beliefs. But after lowering their guard and giving their money to a promoter, they can end up losing their entire investment. The truth is, no matter who is promoting an investment opportunity, you should always protect yourself by maintaining your skepticism and investigating before investing your money. Don’t be taken in by testimonials from other group members who express enthusiasm for an investment’s success. A friend or colleague may be a victim of a scam already, and have no idea what they are pitching to you is not legit. What should you look out for? Be leery about promises of “guaranteed” investments since all investments involve risk. In addition, be very skeptical when high rates of return are promised, especially when few investments are earning high returns. Before considering an investment, investors should (at minimum) check if the salesperson is registered to sell securities in Nova Scotia, and if the security has been properly registered with the Commission. You could also conduct a background check, or investigate a firm or investment opportunity. Affinity fraud are some of the saddest cases that regulators see, because people not only lose their money but they’ve been betrayed by someone they trusted. Don’t let it happen to you. Tagged as: affinity, fraud, scams, union Share & Bookmark This Story! Bookmark on Delicious StumbleUpon Google BookmarksTip’d

Source: http://feedproxy.google.com/~r/http/wwwbeforeyouinvestca/~3/55-4RlF8WKc/

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