Home > BBB Services > News
January 4, 2006
INVEST WISELY IN 2006, BBB ADVISES
VANCOUVER – With the start of the New Year, many people will resolve to improve their financial security by taking advantage of investment opportunities. To steer clear of risky ventures, the Better Business Bureau is urging would be investors to carefully evaluate the investment product or program, its promoters and its sales pitch.
“Every day, BBBs hear from consumers who invested in what they thought were solid and sure money-makers. They abandoned their common sense and succumbed to enticing promotions that were short on details but full of dollar signs,” said Sheila Charneski, President of the Better Business Bureau of Mainland B.C.
According to Sheila Charneski, investment schemers frequently try to peddle products using sales pitches that are “tied to the headlines.”
Recent suspect promotions include oil-and-gas schemes, “get rich quick” investment seminars and get rich quick scams which try to take advantage of the hot real estate market.
To avoid falling victim to fraud, the BBB advises investors to be particularly cautious of any of the following red flags:
- Words like “risk free,” “guarantee,” “high return,” or “limited offer.” According to government regulators, no financial investment is “risk free” and a high rate of return means greater risk.
- Offshore scams and investment opportunities in other countries, particularly if they claim to be “tax-free” and “confidential.” If you send your money abroad and something goes wrong, it will be particularly difficult to locate your money.
- Promises of “quick” profits or “fast” cash, “ground floor” opportunities, offers to share “inside” information, and pressure to invest immediately because the “market is moving.”
“Before making an investment decision, get the facts in writing,” said Sheila Charneski. “At the very least, you should obtain and verify the following information:
- If the investment and seller are licensed and registered. Check with the B.C. Securities Commission at www.bcsc.bc.ca.
- If there is a record of complaints about the promoter or the investment company at the BBB at www.bbbvan.org or the B.C. Securities Commission. Real Estate, Credit Unions and Trust investments are somewhat regulated through the Financial Institutions Commission at www.fic.gov.bc.ca.
- The costs to buy, hold and sell the investment.
- The risk that you could lose the money you invest.
- The rate of return to expect on your money and when.
- The company’s headquarter location, how long it has been in business, and its product or service.
- What the promoter is being paid to tout the investment opportunity.”
In addition, the BBB advises investors to always request and carefully read through financial information about the investment, such as a prospectus, annual report, offering circular and financial statements. “Compare the written information to what you were told or read online. Watch out if you are told there is no such information available,” Charneski said.