The Ontario Provincial Police (OPP) Anti-Rackets Branch is sounding the alarm on investment scams in the Hamilton and Burlington areas.
Their Economic Crime and Corruption Unit (ECCU) is looking into Ponzi-type private lending schemes where investors are issued promissory notes.
When you’re investing, keep the following indicators of a Ponzi-scheme in mind:
- Sounds too good to be true: Claims, for example, of never-ending pool of short-term high interest rate borrowers.
- Promises of low risk or high rewards: Promoters of Ponzi schemes typically promise implausibly high or quick returns with little risk. Any guarantee that an investment will perform in a certain way is a signal that it might be part of a Ponzi scheme.
- High-pressure sales tactics: Reputable investment firms and agents do not push potential investors to act immediately, and legitimate investment opportunities are rarely time sensitive.
- Pressure to reinvest: Often fraudsters keep Ponzi schemes alive by convincing investors to reinvest their profits rather than take a payout.
- Lack of transparency or access: Secrecy surrounding the operation of the financial company should be an immediate warning sign. If the schemer can't or won't provide verifiable sources of capital, equity or collateral then be wary of investing.
If you feel that you may be a victim of an investment scam, please call Halton police’s non-emergency line at 905-825-4777 or the Fraud Intake Line at 905-465-8741. It is also recommended that you contact the Canada Anti-Fraud Centre at 1-888-495-8501 to report suspected fraudulent activity.
You can learn more, including tips and resources pertaining to fraud, on Halton police's website.