Look for any of these red flags when investing. If you spot a red flag, exercise caution before making a decision. The investment may be a scam, or you could be dealing with a fraudster. Immediately, report suspicious activity to your local securities regulator. Fraudsters can reach potential victims through emails, phone calls, texts or social media, be vigilant everywhere!
 
To report an individual or a firm you suspect is acting fraudulently, contact your local securities regulator. 

Most common red flags

Pressure to Make a Quick Decision
Individuals who promote fraudulent schemes want to limit your time to research the investment and potential uncover the scam. They may also pressure you to invest a little at first. Once you invest, the fraudster may claim you have earned money in an attempt to get you to invest more. 
Often seen in: Email spam, crypto scams, boiler rooms 

Unregistered Individuals and Firms
Generally speaking, an individual or firm must be registered with the securities regulator of the provinces or territories where they want to operate. Use the National Registration Search (NRS) to check registration. If an individual or firm selling an investment or offering advice is not registered with an official organization, stop dealing with them immediately and contact your local securities regulator. Always use an individual’s business contact information provided by a registered firm.  
Often seen in: Ponzi scheme, pig butchering, crypto scams 

Unrealistic Returns
Returns that are “too good to be true” probably are, and all investments have some level of risk. Fraudsters often try to hook people by guaranteeing extremely high returns in a short period of time with little or no risk.  
Often seen in: Forex scams, crypto scams, pump and dump, exempt securities scams 

Exclusive Investment Offers
Be wary of investments that are promoted as exclusive offers only you and select people, like wealthy insiders, have access to. Fraudsters like to name drop, or say they have access to famous or rich people when promoting an investment.  
Often seen in: Ponzi scheme, affinity fraud, crypto scams, investment seminar scam 

“Insider” Information
If an investment adviser or individual says they are giving you “confidential” investment advice, they may actually be deceiving you or committing insider trading. Both put you at risk. It is illegal to knowingly trade on inside information.  
Often seen in: Crypto scams, boiler rooms, exempt securities scams

Offshore Firms and Advisers
If a firm or individual from outside of Canada is trying to open an account for you, wants to give you trading or investment advice, or is offering you an investment, be extremely wary. Brokerage firms need to register with your province or territory as dealers or advisers in order to open trading accounts or recommend investments to you.  
Often seen in: Crypto scams, forex scams, offshore investment scams 

Anti-Establishment
Any individual who encourages you to ignore the government or avoid financial institutions is most likely trying to keep their illegal activities from being tracked. 
Often seen in: Boiler rooms, crypto scams

Cutting out the Paper Trail
Without documents for investment purchases, statements, or a prospectus (a formal document that explains the details of an investment and the risks involved), a fraudster can easily take your money without being detected. 
Often seen in: Pig butchering

Avoiding the Question
If the person selling you the investment doesn’t answer your questions or they use diversionary tactics, they’re probably trying to keep you from seeing the truth. A legitimate investment adviser has nothing to hide. 
Often seen in: Pig butchering, affinity fraud

Unsolicited Contact with Casual Familiarity
Be cautious of unexpected calls, emails, or messages from individuals who seem overly friendly or familiar. Fraudsters may try to establish false familiarity to quickly build trust and avoid suspicion. 
Often seen in: Affinity fraud, romance scams, pig butchering

Frequent Travel Claim
Beware of individuals who claim they are frequently traveling and cannot meet in person. This is a common excuse used by fraudsters to avoid face-to-face interactions. By mentioning overseas business trips, the fraudster creates the image of a successful and busy professional.  
Often seen in: Crypto scams, boiler rooms 

Risk Free, High Return
Be skeptical of promises of high returns with little or no risk. Legitimate investments come with various levels of risk, and no one can guarantee high returns without any risk. 
Often seen in: Forex scams, crypto scams, pump and dump

Addressing Scam Concerns Directly
The line “Are you worried this is a scam?” is a common scammer tactic to preemptively counter skepticism by overemphasizing their credentials and reliability.  
Often seen in: Affinity fraud, pig butchering, romance scams 

Unrequested personalized advice from strangers
This is a manipulation tactic often used by fraudsters to build trust. While it is normal to receive personalized guidance when dealing with a registered financial adviser, it is not normal when approached by a stranger. 
Often seen in: Investment seminar scams, pig butchering, affinity fraud 

Fake website / Social Profiles
Fraudsters will often try to recreate official websites or social media profiles to make you think you are dealing with a legitimate organization. Look out for typos in the content and verify with official sources and registration check using the NRS. 
Often seen in: Crypto scams, binary options scams 

Fake Registration Proof
Fake documents are used to deceive investors into believing that the scammer is a trustworthy and authorized investment professional, when in reality, they are not.  
Often seen in: Pig butchering, investment seminar scams 

A Timely Opportunity
Fraudsters will use this psychological tactic, the fear of missing out (FOMO), to make you believe you are missing a great opportunity. They create a sense of urgency and excitement, making it seem like everyone else is getting rich quickly, and if you don’t act fast, you’ll miss out. 
Often seen in: Pig butchering, crypto scams, ponzi scheme

(Fake) Celebrity Endorsements
Be wary of investment opportunities that claim to have endorsements from celebrities. Fraudsters often use fake endorsements to lend credibility to their schemes. Always verify the authenticity of such endorsements by checking official sources.  
Often seen in: Crypto scams, affinity fraud

Remote Access and Screen-Sharing Requests
Fraudsters may request remote access to your computer to guide you in installing investment software. In reality, they are trying to steal personal information or install malicious software. Never grant remote access or share your screen with someone you do not know or trust. 
Often seen in: Pig butchering, crypto scams

Investment Opportunity Out of Nowhere
After building a fake relationship with you over a period of time, the fraudster may present you with an investment opportunity that they ‘stumbled’ upon. They may also tell you that they already made a lot of money or that a friend already made money.  
Often seen in: Romance scams, pig butchering, affinity fraud

Opportunity Tied to Trends or Recent Event
Be cautious of investment opportunities that are linked to current trends or recent events. Fraudsters often exploit popular topics to make their schemes seem more legitimate and exciting. 
Often seen in: Crypto scams, boiler rooms 

Asking for More Money Over Time
Be wary of individuals who continually ask for more money after your initial investment. This is a common tactic used by fraudsters to extract as much money as possible.  
Often seen in: Pig butchering, romance scams 

Special Fees or Taxes to Withdraw
Be skeptical of any investment that requires you to pay special fees or taxes to withdraw your money or gains. Legitimate investments do not have hidden fees or unexpected charges.  
Often seen in: Crypto scams, offshore investment scam