investment fraud quiz

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Investing can be part of a healthy financial future, providing you with greater personal freedom, a healthy retirement, a sense of security or the ability to afford the things you want in life. Having a financial plan, knowing how to talk to advisers and doing your research are important steps to achieving it.

Investment fraud can jeopardize those goals, but there are ways that you can protect yourself. To stop it, you need to understand it. Investment scams are a dime a dozen, but did you know that many fraudsters follow a series of steps that are easy to identify if you know what to look for? It’s a playbook of sorts — while the scam may look different on the surface, the plays are mostly the same.

This quiz is a fun way to determine if you are able to recognize and avoid investment scams and know what to do to take action.

Q1: Fraudster's often identify potential target(s) for their scams by:*

Using friends and family through in-person interaction with groups.

Leveraging common fears and anxieties like unemployment or retirement concerns.

Approaching you through email, online ads or phone calls.

Using current events and economic downturns to identify targets who may be vulnerable.

The first three answers.

All of the above.

Fabulous! You knew the answer was ‘All of the above.’

Unfortunately, you didn't get that right - the answer is ‘All of the above.’

Step One in the playbook shows that fraudsters identify potential victim(s) for their scams a number of ways. They might:

Capitalize on current events, trends, and economic downturns to uncover potentially vulnerable targets.

Identify targets by leveraging common fears or anxieties like unemployment, insufficient retirement savings and FOMO (fear of missing out) on a money-making opportunity.

Initiate communication through online ads, emails, phone calls, letters or in-person interaction at community or group events — which may include using friends or family as camouflage for a scam.

Q2: When a new friend or acquaintance offers an investment opportunity, you should:*

Trust them if they come through a friend, family member or community group.

Talk about your personal finances at large gatherings or with your social community.

Be wary with new acquaintances who take an immediate interest in your financial wellbeing.

You have this figured out! ‘Be wary with new acquaintances who take an immediate interest in your financial wellbeing’ is the correct answer.

Incorrect. You should first ‘Be wary with new acquaintances who take an immediate interest in your financial wellbeing.

New friends can add a lot to your life, but Step Two in the playbook provides some things you can do to protect yourself from potential investment fraud:

Create boundaries for your personal finances and private matters, whether that’s at work, at family gatherings or even at a place of worship.

Be wary of new friends or acquaintances that take an immediate interest in your financial wellbeing.

Don’t automatically trust a new acquaintance that comes through a friend, family member or community.

Q3: A fraudster tries to get your interest by:*

Dropping hints or talking about how they achieved their wealth or success.

Mention an opportunity with high returns with little or no risk.

Providing returns to a few investors.

All of the above.

You're right! Step Three in the playbook outlines that ‘All of the above’ is correct.

While that is one way, you might want to review Step Three and the red flags of fraud because these are all tactics a fraudster uses on people.

Showcasing the benefits of an “investment” opportunity is one way that a fraudster might get your attention. Others include:

Flaunting wealth and success while openly and frequently talking about how it was achieved.

Casually mentioning the opportunity and its high returns with little to no risk.

Providing “returns” to a few early investors, such as your friends or family, to support their claims.

Q4: Which of the following is not a potential red flag of fraud:*

Time sensitive offers.

Exclusive offers or insider tips.

Guaranteed high returns with little or no risk.

Offshore and tax-free investments.

Professional presentations and sales brochures.

Using personal connections.

Celebrity endorsements.

Correct. While a fraudster may have ‘Professional presentations and sales brochures’, they are not a red flag of an investment scam.

Incorrect! This is a common red flag of fraud used by fraudsters. The correct answer is presentations and sales brochures. Fraudsters may have ‘professional presentations and sales brochures’, but they are not a red flag of fraud. Learn more about the common red flags of fraud below.

Warning signs can pop up at any time, but the fraudster may especially use them to create a sense of urgency or intimacy to make the offer more attractive. The red flags of fraud are:

Time-sensitive offers — restricts your ability to research the opportunity/gives you less time to talk it over with those you trust.

Exclusive offers/insider tips — secrecy increases appeal and discourages you from discussing with others who might ask questions.

Guaranteed high returns with little to no risk — appeals to those who are risk-averse but want bigger returns.

Offshore and tax-free investments to avoid legitimate taxes on capital gains from investments.

Personal connections — using friends or family to make the investment opportunity seem safe and appealing.

Celebrity endorsements — creates immediate trust, whether the celebrity is involved or not.

Q5: If you are offered an investment opportunity that you are not sure about, you should:*

Know how to identify the signs of investment fraud.

Research the investment.

Check the registration and enforcement history.

Contact the ASC if you think it is an investment scam.

All of the above.

You got it with ‘All of the above’! You're on the right track to protecting yourself from investment fraud.

Incorrect. To protect yourself from investment fraud, you need to consider ‘All of the above.’

When offered any investment opportunity, you should make sure it’s real and right for you with these tips from Step Four of the playbook:

Be wary of any friend, acquaintance or new contact who tries to sell you an investment based on your financial circumstances or anxieties.

Recognize that the offer could either come from a face-to-face connection, or that you may never see the person trying to get your money. Fraud works both ways.

Know how to identify the red flags of investment fraud at CheckFirst.ca. If someone is offering you an investment that sounds too good to be true, it usually is.

Check the registration and enforcement history of the individual or firm offering the investment at CheckFirst.ca, and instruct your friends and family to do the same. It takes a few minutes and could save you thousands of dollars and emotional stress.

Contact the ASC if you feel you or someone you know could potentially be involved with an investment scam. Better to be safe than sorry, and you may help stop someone else from becoming a victim.

Q6: Your friend is asking you if you are going to invest in his opportunity. You should:*

Review the investment with someone you trust, who is not involved in the investment like a lawyer, accountant or financial adviser.

Only invest a little bit of money at first to make sure it’s a good investment.

Invest right away, even though you don’t fully understand the opportunity. After all, a guaranteed return of 8 or 9 per cent is good in a low interest environment.

Yes, it is always a good idea to ‘Review the investment with someone you trust, who is not involved in the investment like a lawyer, accountant or financial adviser.’

Never invest in anything that you haven't thoroughly checked out. Consider ‘Reviewing the investment with someone you trust, who is not involved in the investment like a lawyer, accountant or financial adviser.’

Step Five in the playbook outlines what to do before you hand over your money:

Be skeptical of anyone demanding your money immediately for an investment — do not allow yourself to be rushed into any investment.

Do not sign anything you do not understand or haven’t read in full.

Make sure to review contracts and paperwork thoroughly for red flags and inconsistencies.

ALWAYS check the registration and enforcement history of any individual or firm offering you an investment opportunity before handing over your hard-earned money.

By law, anyone selling investments must almost always be registered in the province they are selling in. If they claim they are offering the investment under an exemption, use the Contact Us page on CheckFirst.ca. We can help you understand what an exemption is and if it is valid in this circumstance.

Review the investment with a trusted person not involved in the investment, like a lawyer, an accountant or your financial adviser.

Do not invest until you have done your research and have satisfactory answers to all your questions.

Q7: You’re having second thoughts about your investment. When you ask for your money back, a fraudster is unlikely to:*

Tell you that you knew the risks, but that the payday is coming.

Give you your money back, and then recommend another opportunity more suited to you.

Ignore your emails and phone calls.

Tell you he lost money on it too, but that you both can get it back plus more with an additional investment.

You are scam savvy, knowing a fraudster is unlikely to ‘Give you your money back, and then recommend another opportunity more suited to you.’

No, a fraudster is likely to do that. The correct answer is ‘Give you your money back, and then recommend another opportunity more suited to you.’

You may hear a lot of excuses at this point, but typically you won’t see your money returned. As shown in Step Six of the playbook, a fraudster might:

Refuse to give money back when requested, or according to a previously agreed upon schedule, and provide excuses for why it is inaccessible ‘at the moment.’

Reassure you that money will be available at a later date and that the investment is solid.

Request additional investment money for the supposed long-term benefit of the investment.

Ignore you and stop responding to inquiries if they continue to ask for their money back, or ask for more details.

Q8: You get a call from a firm offering to get your money back on a bad investment for a fee. You think that:*

It sounds legitimate as they know all of the details of your investment. You decide to pay the fee.

If you’ve been a victim of a scam once, it’s unlikely that you will become a victim again.

You should report anyone contacting you after being defrauded.

You should get your neighbour to pay the firm’s fee as they recommended the investment in the first place.

3 plus 10 equals?*

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Investment Fraud Playbook Quiz

Fabulous! You knew the answer was ‘All of the above.’

Unfortunately, you didn't get that right - the answer is ‘All of the above.’

Step One in the playbook shows that fraudsters identify potential victim(s) for their scams a number of ways. They might:

Capitalize on current events, trends, and economic downturns to uncover potentially vulnerable targets.

Identify targets by leveraging common fears or anxieties like unemployment, insufficient retirement savings and FOMO (fear of missing out) on a money-making opportunity.

Initiate communication through online ads, emails, phone calls, letters or in-person interaction at community or group events — which may include using friends or family as camouflage for a scam.

You have this figured out! ‘Be wary with new acquaintances who take an immediate interest in your financial wellbeing’ is the correct answer.

Incorrect. You should first ‘Be wary with new acquaintances who take an immediate interest in your financial wellbeing.

New friends can add a lot to your life, but Step Two in the playbook provides some things you can do to protect yourself from potential investment fraud:

Create boundaries for your personal finances and private matters, whether that’s at work, at family gatherings or even at a place of worship.

Be wary of new friends or acquaintances that take an immediate interest in your financial wellbeing.

Don’t automatically trust a new acquaintance that comes through a friend, family member or community.

You're right! Step Three in the playbook outlines that ‘All of the above’ is correct.

While that is one way, you might want to review Step Three and the red flags of fraud because these are all tactics a fraudster uses on people.

Showcasing the benefits of an “investment” opportunity is one way that a fraudster might get your attention. Others include:

Flaunting wealth and success while openly and frequently talking about how it was achieved.

Casually mentioning the opportunity and its high returns with little to no risk.

Providing “returns” to a few early investors, such as your friends or family, to support their claims.

Correct. While a fraudster may have ‘Professional presentations and sales brochures’, they are not a red flag of an investment scam.

Incorrect! This is a common red flag of fraud used by fraudsters. The correct answer is presentations and sales brochures. Fraudsters may have ‘professional presentations and sales brochures’, but they are not a red flag of fraud. Learn more about the common red flags of fraud below.

Warning signs can pop up at any time, but the fraudster may especially use them to create a sense of urgency or intimacy to make the offer more attractive. The red flags of fraud are:

Time-sensitive offers — restricts your ability to research the opportunity/gives you less time to talk it over with those you trust.

Exclusive offers/insider tips — secrecy increases appeal and discourages you from discussing with others who might ask questions.

Guaranteed high returns with little to no risk — appeals to those who are risk-averse but want bigger returns.

Offshore and tax-free investments to avoid legitimate taxes on capital gains from investments.

Personal connections — using friends or family to make the investment opportunity seem safe and appealing.

Celebrity endorsements — creates immediate trust, whether the celebrity is involved or not.

You got it with ‘All of the above’! You're on the right track to protecting yourself from investment fraud.

Incorrect. To protect yourself from investment fraud, you need to consider ‘All of the above.’

When offered any investment opportunity, you should make sure it’s real and right for you with these tips from Step Four of the playbook:

Be wary of any friend, acquaintance or new contact who tries to sell you an investment based on your financial circumstances or anxieties.

Recognize that the offer could either come from a face-to-face connection, or that you may never see the person trying to get your money. Fraud works both ways.

Know how to identify the red flags of investment fraud at CheckFirst.ca. If someone is offering you an investment that sounds too good to be true, it usually is.

Check the registration and enforcement history of the individual or firm offering the investment at CheckFirst.ca, and instruct your friends and family to do the same. It takes a few minutes and could save you thousands of dollars and emotional stress.

Contact the ASC if you feel you or someone you know could potentially be involved with an investment scam. Better to be safe than sorry, and you may help stop someone else from becoming a victim.

Yes, it is always a good idea to ‘Review the investment with someone you trust, who is not involved in the investment like a lawyer, accountant or financial adviser.’

Never invest in anything that you haven't thoroughly checked out. Consider ‘Reviewing the investment with someone you trust, who is not involved in the investment like a lawyer, accountant or financial adviser.’

Step Five in the playbook outlines what to do before you hand over your money:

Be skeptical of anyone demanding your money immediately for an investment — do not allow yourself to be rushed into any investment.

Do not sign anything you do not understand or haven’t read in full.

Make sure to review contracts and paperwork thoroughly for red flags and inconsistencies.

ALWAYS check the registration and enforcement history of any individual or firm offering you an investment opportunity before handing over your hard-earned money.

Review the investment with a trusted person not involved in the investment, like a lawyer, an accountant or your financial adviser.

Do not invest until you have done your research and have satisfactory answers to all your questions.

You are scam savvy, knowing a fraudster is unlikely to ‘Give you your money back, and then recommend another opportunity more suited to you.’

No, a fraudster is likely to do that. The correct answer is ‘Give you your money back, and then recommend another opportunity more suited to you.’

You may hear a lot of excuses at this point, but typically you won’t see your money returned. As shown in Step Six of the playbook, a fraudster might:

Refuse to give money back when requested, or according to a previously agreed upon schedule, and provide excuses for why it is inaccessible ‘at the moment.’

Reassure you that money will be available at a later date and that the investment is solid.

Request additional investment money for the supposed long-term benefit of the investment.

Ignore you and stop responding to inquiries if they continue to ask for their money back, or ask for more details.

Your form has been submitted

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Remember, if you’ve been the victim of investment fraud:

Do not be fooled by recovery agencies or individuals who contact you saying they can recover your money for a fee.

Credible agencies and organizations like the ASC, police services and the RCMP will never ask you for money to investigate what happened.

Do not be fooled by anyone with a vested interest in your “investment” – paying any money to sell your own “shares” or recover your own investment is a BIG red flag of fraud.

Blog | Is remote access technology safe? How to protect yourself from the makings of an investment scam

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