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The pitch is seductive. Advertisements, which ran online and on the radio, claim that Americans are now "legally piggybacking [on] Canadian Social Security," exploiting a potential loophole to "begin collecting 'work-free' income checks running from $400 to $4,700 per month."
There's only one problem: that's not the way it works, according to authorities.
The ads promote an investing newsletter published by Agora Financial that claims it can help subscribers mimic the portfolio and returns of the Canada Pension Plan, the country's national retirement plan.
"In order to participate in the Canada Pension Plan, you must have worked and contributed to it in Canada, " said Marie-France Faucher, a spokeswoman for Employee and Social Development Canada, the department of the Canadian government that administers the plan.
When CNBC.com showed Faucher the ads, shesaid, "The department takes every allegation of possible errors, fraud or abuse very seriously, and, as such, we have referred this matter to the appropriate authorities. "
AARP spokesman Mark Bagley said the Fraud Watch Network has received "only a minimal number of complaints citing financial newsletters." Although he added, "That does not necessarily mean it is not a problem. Someone seeing an investment pitch in a financial newsletter that they think is questionable may not perceive it to be 'fraud' and may not be prompted to report it to the FWN. "
Agora Financial did not return calls and emails seeking comment.
This is not the Baltimore-based financial newsletter publisher's first time receiving criticisms about its advertising. In 2003, the U.S. Securities and Exchange Commission filed a complaint against Agora, a subsidiary of Pirate Investor LLC, and editor Frank Porter Stansberry for falsely claiming one of its newsletters had insider information on a publicly traded company that enriches uranium.
In 2007, a federal court ordered Pirate Investor and Stansberry to pay $1.5 million in restitution to investors and civil penalties. Pirate Investor and Stansberry fought the decision all the way to the U.S. Supreme Court, which refused to hear its appeal last year. Stansberry continues to insist that his reporting was "honest, materially correct and is certainly protected by the First Amendment."
The SEC filed a complaint against Agora, Pirate Investor and Stansberry because they claimed to have insider information, said Bonnie Patten, executive director of Truth in Advertising, an advertising watchdog organization.
The Federal Trade Commission regulates truth-in-advertising practices for financial newsletters and most other companies.
"We can't opine on whether a particular business practice is legal or not," said Frank Dorman, an agency spokesman. The FTC hasn't filed any cases against Agora Financial, he said.
Patten, who reviewed the "Canadian Social Security" ads, said they don't appear to conform with truth-in-advertising guidelines because they don't clearly disclose the risks associated with the investment strategy or what type of returns an average investor can expect.
Last year, Truth in Advertising sent a complaint letter to an Agora Financial subsidiary, Stansberry & Associates Investment Research, which is run by the same man who was named in the SEC complaint, about hundreds of testimonials touting its newsletters. Truth in Advertising threatened to file complaints with the SEC, FTC and Maryland attorney general if Stansberry & Associates did not remove the testimonials. The company took the testimonials down as requested.
"Deceptive advertising is a moneymaker," Patten said. "Most companies that engage in it see it as a cost of doing business."