Investment schemes

  
     
February 21, 2013


We would like you to do your homework and avoid the potential risks involved with fraudulent investment schemes. Consumers can protect themselves from investment schemes by doing the following:

-Get the facts. If you do go to an information session, collect business cards, promotional materials, and ask questions such as, who are the principals of the company? When the company started? Ask how much is the start-up cost? Gather as much information as possible, before agreeing to anything. Pass along the information you collected to your local RCMP.

-Research the company. Contact the Better Business Bureau to see if there is a history with this company or its principals. Even doing a simple internet search can yield some interesting consumer reports on potential schemes.

-Not all investments are fraudulent. Multi-level or "network" marketing plans are a way of selling goods or services through distributors. These plans typically promise that if you sign up as a distributor, you'll receive commissions for your sales and those of the people you recruit to become distributors. However, the focus of these plans should be selling a viable product, not the recruitment of others, or other limitations including your financial contribution.

-Joining a multi-level marketing company is legal in Canada, but consumers still have to ask questions to determine if it right for them: What's the company's track record? What products does it sell? Is the product competitively priced? Is it likely to appeal to a large customer base? How much is the investment to join the plan? Is there a minimum monthly sales commitment to earn a commission? Will you be required to recruit new distributors to earn your commission? Learn more about pyramid schemes and multi-level marketing from www.bbb.org or visit the Competition Bureau www.competitionbureau.gc.ca.