Hamilton Fraudulent GIC schemes-What You Should Know

(NC)-If it sounds too good to be true, it probably it is. Truer words were never spoken about a disturbing scheme that involves the sale of fraudulent Guaranteed Investment Certificates (GICs), cooked up by fraud artists wanting to make a quick buck.

Under the scam, investors are being sold no-risk GICs with above-average interest rates and a faster than normal maturity date. The scheme may appear genuine, but it is intended to trick consumers into paying for investments that are not legitimate or don't even exist.

Fraudsters have gotten quite sophisticated in targeting people directly by e-mail or through special offers on websites or in community newspapers. The ads have the look and feel of legitimate loan and trust companies and promise rates of return that are higher than most financial institutions if the buyer acts quickly. When you call the phone number in the ad to discuss purchasing the GIC, you are asked to provide payment through a money order or money wiring service. In some cases, the individual may want you to provide payment by cash. In reality, it's all a scam - there is no GIC and there is no company, just a crook wanting to take advantage of people financially.

Here are some tips to protect yourself:

  • If you are dealing with an advisor, insist on seeing his or her credentials or accreditations
  • To verify the advisor's credentials or accreditations, contact the related professional association, governing body or academic institution
  • Most associations and governing bodies have directories of registrants in good standing;
  • If you are promised a guaranteed return for a GIC, make sure you have proof in writing and double-check that the company offering the return is legitimate;
  • Do not provide payment for GICs through money orders, money wiring services, or by cash - this is not a practice in the financial industry;
  • If you suspect fraudulent activity contact the police;
  • If you plan to purchase GICs from a loan and trust company, credit union or caissepopulaire in Ontario, make sure the company is registered with the Financial Services Commission of Ontario (FSCO) by visiting the website: www.fsco.gov.on.ca
  • If you are dealing with a bank, check that it is licensed/registered with the Office of the Superintendent of Financial Institutions (OSFI) by visiting its website: www.osfi-bsif.gc.ca.

- News Canada

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