Quebec AMF Alerts Public to Multi-Level Marketing Scams

Quebec’s financial markets regulator, the Autorité des marchés financiers (AMF), has issued a warning regarding multi-level marketing investment schemes that may be associated with pyramid scams. In a recent news release, the AMF cautioned the public to exercise vigilance when approached with promises of financial freedom through these schemes.

The AMF highlighted that certain organizations and individuals are actively targeting residents of Quebec, encouraging them to invest and earn money by recruiting others into the schemes. “To this end, investors are being encouraged to solicit people in their circle,” the AMF stated, mentioning friends, family members, colleagues, and members of their ethnic or religious communities as potential recruits.

Promoters often conduct in-person or online promotional events, including Zoom presentations, during which they deploy various persuasive techniques. These include enticing claims of financial independence, personal growth, and sharing what are frequently fabricated success stories.

The regulator pointed out that most promoters and organizers lack the necessary registration to act as financial advisers or dealers. This raises significant concerns as participants could face considerable financial losses as a result of their involvement.

In its release, the AMF emphasized the importance of regulatory compliance, stating, “The offering of investments—whether over the Internet, by telephone, or in person—is a regulated activity.” It stressed that any individual or firm promoting an investment product must be registered with the AMF or qualify for a registration exemption.

To help individuals verify the legitimacy of those soliciting investments, the AMF encourages the public to consult its information centre or check the register of firms and individuals authorized to operate.

Steps to Avoid Investment Fraud

The AMF has outlined several critical steps that investors can take to protect themselves from potential financial fraud. These include:

1. **Research the promoter**: Always verify whether the individual or organization is registered with the AMF.
2. **Be cautious of high returns**: If an investment seems too good to be true, it likely is.
3. **Avoid pressure tactics**: Legitimate investments do not require immediate commitment.
4. **Seek advice**: Consult with a registered financial advisor before making investment decisions.

By following these guidelines, individuals can better safeguard their finances and avoid falling victim to deceptive practices. The AMF’s alert serves as a crucial reminder of the ongoing dangers posed by pyramid schemes and the importance of due diligence in investment opportunities.