Listen Live
HomeNewsLocal CFP concerned about potential "gifting circle" scam

Local CFP concerned about potential “gifting circle” scam

A potential scam in Grande Prairie has caught the attention of a local certified financial planner. Kris Podolski of Perry Securities says a client was concerned about an investment his coworker had told him about.

It involved a $5,000 buy in, which was promised to eventually pay out $40,000 from eight other people below him. Podolski says those kind of pyramid schemes always collapse, and people at the bottom can lose big.

“I want to make sure people are aware, make sure they know what to watch for because I’ve seen people lose their life savings or risk their life savings in these type of schemes, and it’s just incredibly unfortunate when it happens.”

Fortunately in this case, the client was concerned and checked into the offer before investing. When it comes to watching out for fraud, Podolski uses the old adage, “If it sounds too good to be true, it probably is.”

- Advertisement -

“A few red flags are if you are guaranteed a high return with little risk; if you are involved in investments that somehow continue to pay great returns regardless of the economic or market conditions.”

Other things to watch out for a deals that are complex or secretive, and when people aren’t using their real names. In one “gifting circle” scam, the top person on the pyramid went by the name of Snow White, with the seven people below him given the names of her seven dwarves.

Over the past 12 months, Podolski’s helped two people file complaints of potential financial fraud to the Alberta Securities Commission. However, he understands how so many people fall victim.

“They shouldn’t feel bad if they are tricked because these people are professionals and they’re good at what they do. They do anything and everything necessary to try and get people involved.”

Schemes like this are illegal, and if you’re concerned for yourself or a friend, report it to the RCMP and Alberta Securities Commission. This case has already been reported to the Grande Prairie detachment.

- Advertisment -
- Advertisment -
- Advertisement -

Continue Reading

You found me!