These scams often find their victims through ads placed in newspapers or on Internet sites. The ads look legitimate and offer you an exciting opportunity to invest your money on the foreign exchange (forex) market. You'll be told the person investing your money has a great track record and you'll be promised a high return.

What usually happens is that your money is not invested in anything, but simply is stolen by the scam artist. If your money is invested in the forex market, you may not have been told that the investment is very risky. Either way, you're likely to lose some or all of your money.

In this type of scam, the fraudster will promise you a high return from an investment in an offshore market.

What you may not know is that once your money is sent to another country and is in someone else's control, you may not be able to get it back. The promised high return comes with a high risk that you'll lose your entire investment.

In a typical pump and dump scam, you receive an email or phone call promoting an incredible deal on a low-priced stock. What you don't know is that the person or company contacting you owns a large amount of this stock. As more and more investors buy shares, the value skyrockets.

Once the price hits a peak, the scam artist sells their shares and the value of the stock plummets. You're left holding worthless stocks.

Affinity fraud is a type of scam that targets groups such as religious groups, seniors' groups, ethnic communities or social clubs. The scam artist may be a member of the group or may know someone in the group. These scams are often successful because many people are less likely to question advice that comes from someone they know.

A common type of affinity fraud is the pyramid (or Ponzi) scheme. Typically, investors are recruited through promises of high returns. Early investors often receive returns fairly quickly from "interest checks." They may be so pleased with their returns that they re-invest, or recruit friends and family as new investors.

Here's the catch: The investment doesn't exist. The "interest checks" are paid from investors' own money and the contributions of new investors. The scheme eventually collapses when the number of new investors drops.

Investment seminars have become a popular way of promoting investments. The investments themselves may not be scams, but the sales tactics used at these seminars often raise concerns.

Some presenters are paid to promote specific investments that offer high returns. They may not tell you that these products are risky and may not be appropriate for you. The presenters are usually very good at public speaking and generating excitement about the investment. They'll use high-pressure sales tactics to get you to invest on the spot or to schedule a follow-up appointment.

Many scams begin with spam emails that promote a certain stock. These emails typically promote risky investments for which there's little information available.

You may also get an unsolicited phone call about an investment opportunity. The caller may ask you questions about yourself and use the answers to manipulate you into a quick sale. They'll also use high-pressure tactics, like repeat calls or limited-time offers.

The business may sound real. The caller might give you an address in the financial district, or a website that looks legitimate for more information. However, the information on their website may be fake, and the address they give you may be nothing more than a post office box.

Be sceptical of any stock tips you get from an unsolicited email or phone call. It's a good idea to assume the tip is a scam until you've done your own research on the investment.

Once you've been the target of a scam, you may be targeted again. In fact, 31% of fraud victims are defrauded a second time. This is known as "double-dipping."

Here's how it often works:

1. The person who scammed you keeps your information or sells it to someone else.

2. After some time has passed, you're contacted again—either by the first scam artist or by a new one.

3. The caller explains that your investment is about to pay off and the time is right to sell your shares, but you'll need to pay a "transaction fee" or "tax" first. This is usually a significant percentage of the amount you originally invested.

If this happens to you, chances are the original investment was a scam. Don't send more money. Report the scam to the CMA.

Most scams have some common warning signs that are fairly easy to spot.

Before you invest, ask yourself these questions:

1. Were you promised a high return on a low-risk investment? One of the first rules of investing is that higher return equals higher risk. In other words, the more money you can potentially make on an investment, the higher the risk of losing some or all of your investment.

2. Did you have enough time to make a decision? You should never feel pressured into buying an investment on the spot. If you hear things like "act fast," "one-time opportunity" or "buy now before it's too late," the person you're talking to likely has something to hide.

3. Were you given confidential or "inside" information? A scam artist may claim to have information that nobody else knows about a company. You have no way of knowing if this "inside" information is true.

4. Can you verify the investment with a credible source? If you receive an unsolicited investment opportunity, get a second opinion from your registered Financial Adviser, lawyer or accountant.

5. Is the person who contacted you registered? Anyone who tries to sell you an investment or give you investment advice must be registered unless they have an exemption. You can contact the CMA to check if a person and the firm they work for are registered, and to find out if they have been involved in any disciplinary actions.

Also, anyone selling you investments should ask you about your financial situation, investment objectives, knowledge, experience and risk tolerance. This "know your client" information is critical for determining what investments are suitable for you. Make sure the person you're dealing with asks you for this information.

If you think it's a scam

Don't be afraid to say no. Just hang up the phone, delete the email or walk away.

If you have a financial plan, you're more likely to choose investments that are right for you.

Before you invest, you may want to set investment goals. Write down what you want to accomplish and by when. Next, think about how much risk you're comfortable taking with your money.

Once you've set your goals and decided how much risk you can take, spend some time learning how different types of investments work. Get a sense of what kind of returns you can reasonably expect for a particular level of risk. This will help you figure out what types of investments may help you reach your investment goals. If you need some guidance, you may want to talk to a Financial Adviser.

Before you buy any investment, find out as much as you can about it. Read financial documents like the prospectus and financial statements.

Also take the time to read:

- Analysts' reports

- Financial newspapers and websites

- Investment newsletters and news groups

You can get a lot of useful information from these sources, but remember each source only forms part of the overall picture of a company.

Be skeptical of what you read and check as many different sources as you can to get a complete picture. You can also get a second opinion from an independent Financial Adviser.

Never invest in anything that you don't fully understand. Take your time making investment decisions and never sign documents you have not read carefully.

If you believe that your Financial Adviser is not working in your best interests, you may want to make a complaint or consider finding another Financial Adviser.

Here's what to do if you want to make a complaint:

1. Start with your Financial Adviser or their authorized institution. Be clear about what went wrong and when. State the outcome you expect (for example, an apology, getting your account corrected or getting your money back). Record details of phone calls or meetings with your Financial Adviser or their authorized institution.

If you're not satisfied

2. Ask about the authorized institution's complaint process. Follow the steps suggested. This could involve contacting a manager or the authorized institution's compliance department. Put your complaint in writing. Be sure to keep notes of who you spoke to and what was discussed.

If that doesn't work

3. Contact the CMA. They can tell you what your options are, depending on the type of complaint you have. In most cases, you have to go through the authorized institution's complaint process first