Canadians have lost $228.5 million to investment scams so far this year, according to a spokesperson for the Canadian Anti-Fraud Centre (CAFC).
Jeff Horncastle of the CAFC told The Epoch Times that investment scams are one of the major categories of fraud that the centre deals with. In 2022, Canadians lost $305.4 million to fake investment predators.
“A lot of these frauds are offering get-rich-quick opportunity. So naturally, if the person is in financial distress or vulnerable they’re probably more at risk of falling for these investment scams,” Mr. Horncastle said.
Cryptocurrency scams are among the most common types of such fraud, according to CAFC, adding they often require an investor to download a trading platform that fraudsters control.
“After investing and seeing their money grow in the trading account, victims are often unable to withdraw any funds,” a CAFC social media post said. “These frauds often result in investors losing most, or all, of their money.”
‘They Love Search Engine Optimization’
Mr. Horncastle said that fraudsters use technology to find and trap victims. “They love search engine optimization,” he said, warning that even Google searches can put people at risk.“You go online, search on Canon customer support, chances are first five or 10 results you’re seeing are probably going to be fraudulent and that’s where the victim may fall into a tech support scam.”
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He said even social media or online pop-ups ads should be handled cautiously, with any messages offering investment opportunities to be carefully scrutinized.
“Compromised social media accounts, where the victim may think that they’re getting a message from one of their contacts, family member or friend. But in reality, the account is compromised,” Mr. Horncastle said.
Meanwhile, technological advances, like artificial intelligence, have given fraudsters more tools.
“We have seen some reports of fake videos where fraudsters will create fake videos using either somebody that’s known to the public, like a celebrity or a news anchor, somebody that they generally trust and with the video they pretend that they’re celebrities promoting their fraudulent platform.”
Types of Investment Scams
On its website, the organization warns of “investment recovery pitch scams,” where fraudsters keep a list of previous scam victims and contact them promising they can get back the lost money—for a fee.Another type of investment scam is romance-related where a fraudster develops an online romantic relationship with the victim. “After trust is gained, the fraudster will claim that they have been a successful investor in cryptocurrency and can help the victim also make money and ‘get rich,’” says the CAFC website.
The victim is then directed to a fake online trading platform to transfer funds or cryptocurrency into their trading account.
“Occasionally, the victim will be able to withdraw a small amount of their ‘investment’ in the hopes they'll be persuaded to invest even more of their money.”
However, at some point in the scam, victims find they are unable to withdraw their funds.
Tips for Investors
Mr. Horncastle said that those looking to invest should take it slow and “do as much research as you can to ensure that you’re using reputable and compliant services. Prior to investing, ask for information on the investment.”He advised potential investors to analyze the feasibility of the project and to be cautious even if the platform looks reliable.
“In most cases after the victim invests they can actually see very legitimate looking platforms these fraudsters create. They actually see their money growing and a lot of cases are able to withdraw a bit of money and that’s usually used as an extra tool to convince the victim that they’re dealing with a legitimate company,” he said.
“But as time goes on, they invest more and more, and as it gets to the end they are not able to withdraw the funds.”
Be cautious of anyone who uses pressure when offering an investment opportunity, Mr. Horncastle advises.
“That’s very common across the board with all fraud, all scams, there’s always pressure. If you don’t invest now you’re gonna miss out on the opportunity to make a lot of money. So, long story short victimization happens very quickly.”
He said people can go to aretheyregistered.ca and use it as a tool to find out if the company is registered. But he cautioned it is not foolproof. “A lot of fraudsters or a lot of criminals will be copying the actual names of real companies,” he said.
Mr. Horncastle said anyone who has been the victim of fraud should contact the CAFC, in addition to their financial institution, to report the crime. CAFC also wants to hear from those who were approached by potential scammers, even if they did not buy in.
“We do accept reports on fraud attempts as well. So even if you have been in contact with a suspect but you haven’t lost money, you can even report it to the Fraud Centre.”
October is Cyber Security Awareness Month in Canada.
