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February 26, 2014
For immediate release
Investor Alert: beware of cold-call scams
Environment, Labour and Justice
A so-called “cold-call investment scam” is a fraudulent practice in which the scam artist disguises itself as a brokerage firm or an asset management firm and approaches potential investors via non face-to-face channels – by phone, fax, or email – in order to convince them to invest in financial products.
Typically, a cold-call scam artist makes unsolicited calls to potential investors, cajoles them into deciding to purchase certain investment products, and then becomes unavailable for contact after the investors send money for the purchase. The investors cannot obtain the investment product although they have already made the payment, and they also cannot get back the money they have paid.
“Investors must be careful and vigilant,” says Steve Dowling, General Counsel for the Prince Edward Island Consumer, Corporate and Financial Services Division. “Cold-call scam artists use varied and sophisticated tactics to lure their victims.” For example, some cold callers execute transactions properly and make profits for investors at first. Then, they solicit greater amounts and convince the investors to transfer additional money. After that, the cold callers disappear.
Anyone who is approached unsolicited to invest in financial products should – before advancing any money – contact staff at the Consumer, Corporate and Financial Services Division at 902-368-4550.