67 Saskatchewan Federation of Police Officers INVESTMENT SCAMS Any false, deceptive, misleading or fraudulent investment opportunity, often offering higher than normal true monetary returns. In a typical pyramid scheme, unsuspecting investors are encouraged to pay large membership fees to participate in money-making ventures. The only way for you to ever recover any money is to convince other people to join and to part with their money as well. People are often persuaded to join by family members or friends. But there is no guarantee that you will recoup your initial investment. Although pyramid schemes are often cleverly disguised, they make money by recruiting people rather than by selling a legitimate product or providing a service. Pyramid schemes inevitably collapse and you will lose your money. In Canada, it is a crime to promote a pyramid scheme or even to participate in one. Ponzi schemes are fraudulent investment operations that work in a similar way to pyramid schemes. The Ponzi scheme usually entices new and well-to-do investors by offering higher returns than other investments in the form of short-term returns that are either abnormally high or unusually consistent. The schemer usually interacts with all the investors directly, often persuading most of the existing participants to reinvest their money, thereby minimizing the need to bring in new participants as a pyramid scheme will do. Be cautious, but don't be discouraged from carefully researching business opportunities based on commissions. There are many legitimate multi-level marketing opportunities where you can legally earn an income from selling genuine products or services. Prevention tips • Pyramid and Ponzi schemes may be sent to you from family members and people you trust. They might not know they're involved in a scam or that the schemes could be illegal. • Be wary of fraudsters requesting large wire transfers to foreign countries for an offshore investment. • Never commit to anything at high-pressure meetings or seminars. • Be wary of fraudsters promising an investment opportunity with a higher than normal return. • Be an informed investor and check with you provincial securities regulator. MEDICAL SCAMS Miracle cure scams offer a range of products and services that can appear to be legitimate alternative medicines, usually promising quick and effective remedies for serious medical conditions. The treatments claim to be effective against a very wide range of ailments and are often promoted using testimonials from people who have used the product or service and have been "cured". Weight loss scams promise dramatic weight loss with little or no effort. This type of scam may involve an unusual or restrictive diet, revolutionary exercise or "fat-busting" devices, or breakthrough products such as pills, patches or creams. The products are promoted with the use of false claims such as "lose 10 kilos in 10 days" or "lose weight while you sleep", and often require large advance payments or that you enter into a long-term contract to participate in the program. continued
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