Scams are becoming more sophisticated and people should do their research first before deciding on an investment opportunity. If it seems too good to be true, it probably is, said the Honourable Dianne Whalen, Minister of Government Services.

"October is Investor Education Month and it is all too easy to get caught up in an investment which seems like it will bring an unusually exceptional return on your money," said Minister Whalen. "Unfortunately, once you've invested in one of these fraudulent investments, there is very little chance that you can get your money back. That is why it is so important to do your research before you commit to anything."

Many of these investment scams are advertised in various media. Before investing, people should contact the Department of Government Services to ensure the company is authorized to do business in this province.

There are a number of things when reading these advertisements that should send a red-flag to investors:

• Promises of high-return, low risk investment opportunities
• Use of financial jargon
• Free seminars and workshops
• High-pressure sales tactics
• Mention of company's "track record"
• Requests for personal information
• Tax savings or tax-shelter information

"We have seen many times the devastation fraudulent investments has caused on individual lives, families and communities. My department takes these issues seriously and when we become aware of these situations, we investigate them to the best of our ability. Unfortunately, by the time we become aware of these investments, it is too late for the individuals involved and they have most likely lost their money," said Minister Whalen.

When the Department of Government Services becomes aware of unauthorized investment activity, it issues a notice to consumers in local media and its web site so that possible investors are aware of the situation or to encourage others affected by the possible scam to come forward. An investigation is carried out and if the company is deemed to be legitimate, we ask them to register their company in this province so they can legally carry out their business. If we determine that a company is illegitimate, we take steps to shut the operation down.

If investors have any doubts about investment opportunities, they should contact the Financial Services Regulation Division of the Department of Government Services at 709-729-4189.

For more information:

Department of Government Services - www.gs.gov.nl.ca/cca/scon/

Canadian Securities Administrators - www.csa-acvm.ca/

Media contact:
Vanessa Colman-Sadd
Director of Communications
Department of Government Services
709-729-4860, 682-6593
vanessacolmansadd@gov.nl.ca