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Ponzi Schemes

An investment fraud that’s made to seem plausible by the payment of quick returns to the first investors from money invested by later investors.

How it works

Typically, investors are recruited through ads and emails promising high returns in very little time. Investors are asked to provide money up front. Early investors may receive high returns fairly quickly from “interest cheques.” They’re often so pleased that they invest more money, or recruit friends and family as new investors. But the investment doesn’t exist. The “interest cheques” are paid from investors’ own money and the contributions of new investors. The scheme eventually collapses when the number of new investors drops. Ultimately, the promoters vanish, taking your money with them.

How to protect yourself

  • Check that the individual and firm selling the investment are registered in New Brunswick. Use the National Registration Search Tool.
  • Get as much written information as possible about the investment. It should include detail about the risks and costs of the investment, and what you have to do to get your money out.
  • If you’re unsure, get a financial professional such as an accountant, lawyer, or a financial advisor to evaluate the investment.  

How to report it

If you suspect you’re a victim of a ponzi scheme, or attempted ponzi scheme, complete the FCNB Submit a Complaint form.

FCNB administers and enforces legislation in the mortgage brokers, payday lenders, real estate, securities, insurance, pensions, credit unions, trust and loan companies, cooperatives, and a wide range of other consumer legislation. If your complaint relates to an area outside of FCNB’s regulated areas, we may refer you to the appropriate reporting agency or organization.