Offering health advice at the Seniors Safety Fair last week was Dr. Brett Phillips

Protecting seniors’ money from fraud scams

Valuable tips passed on by B.C Securities Commission compliance officer at Seniors Safety Fair last week.

“There is no way in hell you will lose on this investment.”

That was the pitch line that led to a senior investing $20,000 in a private company that turned out to be a ponzi scheme, bilking investors of more than $1.2 million.

“It’s an old saying, but if it sounds too good to be true, it probably is,” said Malki Haer, a senior compliance officer for the B.C. Securities Commission, during his presentation about fraud preventio at the 9th annual Seniors’ Safety Fair held last Wednesday at Trinity Baptist Church in Kelowna.

Haer offered some advice for seniors to avoid falling into a fraud investment scheme, noting that once the initial investment cheque is cashed, if the scheme turns out to be fraudulent, the chances of getting your money back are slim and none.

“Sometimes it happens where money is recovered, but generally once they get your cheque, you are out of luck,” Haer said.

Haer said many British Columbians, young and old, have lost their life savings to risky or dangerous investments because they didn’t understand the risks, ask the right questions, do some research or get a second opinion on the investment opportunity presented to them.

“Sometimes the best investment you make is the one you don’t make,” he said.

He told his seniors audience the reasons why anyone gets taken are as old as the day fraud was invented.

Sometimes it’s just a matter of seeing your friends all driving Mercedes, while you have a Honda, he said.

“You want to drive the Mercedes like everyone else, and someone comes along pitching an investment idea that sounds so convincing you can’t say no,” he said.

Another common entry point for scam artists is throughout the church, where church members are encouraged to invest in a can’t-miss scheme, only to end up being ripped off.

“We call that affinity fraud, and the impact of it can be devastating. It breaks up friendships, can lead to divorce and places financial hardships on those affected,” Haer said. “It can rip apart a community.”

He said the impact of a ponzi scheme was illustrated by the Bernie Madoff scandal in the U.S., where a New York investor swindled people out of millions in an elaborate scheme that took years to finally unravel.

“The Enron case is a good example of people getting sucked in by the hype. Enron was originally a small pipeline company that over time became worth billions on paper, but nobody really understood clearly what the company did to generate that value and it was a very complex financial situation to understand,” he said.

“Eventually it went bankrupt and people couldn’t understand why. If an investment is too complicated for you to understand, the best thing you can do is step away.”

Haer told his audience the three key “knows” in avoiding being caught up in a fraud scam are to know yourself and what you are comfortable with in terms of taking risk on an investment, know your financial advisor and know about your potential investment.

“If someone is promoting an investment opportunity to you as a low risk, high return, not tax potential, those are all lies,” Haer said.

“Another is off-shore investments that are tax free. Off-shore means nothing, other than if it is a scam, it will be harder to get your money back.”

Haer said the Internet is a valuable tool of information for doing research on a company seeking investors or a financial advisor or investment promoter trying to get your money.

“I’m not here to scare you away from making investments, just be aware of the fraud scam potential that’s out there, to do your homework, and don’t be afraid to contact the securities commission for information as well,” he said.

Haer said the B.C. Securities Commission’s role is to regulate securities trading in the province. The commission ensures that people who trade securities comply with the Securities Act.

If an individual or company violates the Act, the commission can take enforcement action against them through fines or other disciplinary actions.

“We do not put criminals in jail, that falls under the auspices of Crown counsel to pursue legal charges, and we do not approve investments or undo investment transactions.”

The other major presentation at the seniors’ fair was on the topic of representation agreements, power of attorney and estate planning, led by local lawyer Aaron Dow, with Farris Vaughan Wills Murphy LLP,  and financial investor John Woodfield, with the Raymond James firm.

 

bgerding@kelownacapnews.com

Just Posted

UPDATE: Kelowna man given 4 year sentence after creating pimp operation on dating site

In court the details of how Simon Rypiak lured 4 women into prostitution revealed

Recovering Kelowna addict rises above her past

Victimized by systems suppose to help, a woman tries to fix her life

Plugged in: Kelowna teen thriving with professional eSports U.S. team

Russel Van Dulken turned his love and skills of gaming into a career

Okanagan College names new fundraising director

Helen Jackman will join the college as executive director of the Okanagan College Foundation and director of advancement

Olympian Andi Naude retires from freestyle skiing

Penticton native skied in 62 World Cup single and dual moguls events in her career

VIDEO: Driver in bizarre hit-and-run at B.C. car dealership turns herself in

Police believe alcohol was a factor in incident causing estimated $15,000 in damages

‘B.C. cannot wait for action’: Top doctor urges province to decriminalize illicit drugs

Dr. Bonnie Henry says current approach in ‘war on drugs’ has criminalized and stigmatized drug users

B.C. woman, 76, challenges alcohol-screening laws after failing to give breath sample

Norma McLeod was unable to provide a sample because of her medical conditions

New report on 2017 wildfires calls for better coordination with B.C. First Nations

Tsilhqot’in National Government documents 2017 disaster and lists 33 calls to action

Okanagan experience for the Blue Man Group

The world tour of the Blue Man Group came to Penticton this week for two shows.

B.C. youth coach banned amid sexual harassment, bullying scandal: Water Polo Canada

Justin Mitchell can’t take part in Water Polo Canada events or clubs

Wilson-Raybould: Feds want to just ‘manage the problem’ of Indigenous Peoples

Former federal justice minister speaks at First Nations Justice Council meeting in B.C.

Okangan author shorlisted in B.C. historical writing competition

The BC Lieutenant-Governor’s Medal for Historical Writing will be awarded together with $2,500 to the author whose book makes the most significant contribution to the historical literature of British Columbia.

Most Read