A Ponzi scheme typically recruits investors through ads and emails that promise high returns by joining a special group of investors. Often there is pressure to get in on the scheme quickly. Investors may see returns fairly early but those returns are paid from investors’ own money and money from new investors. The investment does not exist. When new people stop joining the scheme, there will be no money to pay you out and you lose the money you invested. The promoters vanish taking all the money with them. Read more about Ponzi schemes and other common investment scams.
One way to prevent being the victim of a Ponzi scheme is to make sure you check registration of the promoters before making an investment. Learn about 4 signs of investment fraud, how you might be approached and 4 ways to avoid investment scams.
If you feel you have been a victim of an investment scam, contact the OSC Inquiries & Contact Centre for more information.