Top 3 Scams Seniors should be mindful of in 2024

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June 15 is World Elder Abuse Awareness Day, a time when the Alberta Securities Commission (ASC) is encouraging older Albertans and their friends and family to recognize the signs of elder financial abuse and fraud. Investment fraud continues to be the most prevalent form of fraud across Canada with seniors often targeted due to the perception that they have large retirement nest eggs, are thought to be more trusting and potentially have declining mental faculties. Whether you or an older adult in your life is an experienced investor or have never invested before, be mindful of the following pervasive scams.

 

Romance and pig butchering scams

Romance scams have skyrocketed in Canada in recent years with many fraudsters taking to social media platforms and dating apps to connect with those seeking friendship or love, including seniors who may be lonely or isolated. With the use of artificial intelligence generated imagery and voices, fraudsters are able to create convincing online personas. Once fraudsters are able to find a potential victim, they work quickly to establish trust by sharing fabricated details about their life and showering the target with attention and affection. Fraudsters commonly move the conversation to apps like Facebook, WhatsApp and Telegram to avoid having their accounts being suspended before offering tantalizing investment opportunities or offering to invest on the victim’s behalf. Fraudsters may even incorporate some element of a crypto investment, often referred to as a pig butchering scam, with promises of substantial returns. Regardless of the approach, the end result is the same. When trying to withdraw funds the victim is given excuses, or pressure to send more money or claims the money was lost in the investment. After these tactics, the fraudster stops responding and disappears.
Tip: Be extremely skeptical of any new online acquaintance who takes an immediate interest in your finances and any unrequested investment offers.

 

Fake crypto investment promotions

Crypto continues to be a popular topic for many older Albertans who have the expectation that buying in could be a silver bullet to their financial struggles. In reality, investing in crypto is high risk and offers no guarantees of returns. Older Albertans should be wary that fraudsters use a variety of different schemes to pull in victims, including claims of being a “crypto advisor” in online forums and social media, directing potential victims to fake trading platforms and advertising exciting and unrealistic returns in online and social media ads. If you are interested in investing in crypto, it is strongly advised that you take the time to learn more about this alternative investment and verify that any individual, trading platform or company you plan to invest with is registered with the Alberta Securities Commission or another securities regulator before sending money. You can call the ASC public inquiries line at 1-877-355-4488 to verify registration or by clicking here.
Tip: Crypto is high risk and not recommended for everyone. Avoid any crypto offers or trading platforms promising guaranteed returns and little to no risk.

 

Recovery room scams

If you or an older person in your life has lost money to an investment scam, you may be contacted by someone claiming to be from a recovery agency or law enforcement with a promise of helping victims recover their funds for a fee. Fraudsters retarget recent victims using information from the original scam to make the recovery agency look credible. While legitimate recovery agencies do exist, you should discuss any fund recovery options with a lawyer first. Remember, it is rarely possible for recovery agencies to recover your money or crypto.
Tip: Be mindful that neither law enforcement agencies nor the ASC will ever contact you with an unsolicited offer to recover your money or crypto for a fee.

This June, take some time to focus on financial security for yourself and your loved ones. In addition to learning more about investment scams targeting seniors, empower yourself to make sound investment decisions regardless of age.

CheckFirst’s Investing as You Age is your comprehensive and unbiased resource for information on investing at any life stage. Learn more about assessing your investment goals, choosing the right investing method, and recognizing, avoiding and reporting investment fraud and financial abuse.

Concerned about an investment scam?

If you are suspicious about an investment offer you or your loved ones have received or concerned that you may have lost money to an investment scam, do not hesitate to contact the Alberta Securities Commission.

ASC Public Inquiries
403-355-4151
Toll-free: 1-877-355-4488
[email protected] 

Fraud Prevention Month: 4 steps you can take to safeguard your money from investment scams

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March is Fraud Prevention Month, a national spotlight that seeks to help Canadians recognize, avoid and report fraud. One of the growing and most insidious forms of fraud are investment scams, where fraudsters prey on those looking for worthwhile opportunities or just the answer to challenging financial circumstances. According to data from the Canadian Anti-Fraud Centre, the amount of money reported lost to investment scams has multiplied nearly 20 times from 2019 to 2023.

Fraudsters work hard to repurpose their investment scams and leverage connections they can make online and in person. While it may be hard to know and remember the latest investment scams, there are some great resources and tools provided by the Alberta Securities Commission (ASC) to help you better safeguard your hard-earned money.

Consult the ASC’s Investment Caution List

To help inform and protect investors, the ASC created the Investment Caution List. This list outlines companies and individuals that the ASC has identified as appearing to be engaging in activities that either require registration under Alberta securities laws or may be investment scams. It is worthwhile to check this frequently updated list before working with any individual or firm to ensure that they are not present on the list.

Subscribe to the ASC’s Investor Alerts

Investors wanting to stay ahead of emerging fraud trends and market misconduct can also subscribe to the ASC’s Investor Alerts, which are delivered directly to their inboxes. These alerts provide investors with up-to-date information on unregistered individuals and firms violating Alberta and/or Canadian securities law. ASC’s Investor Alerts also help warn the public of common fraud tactics.

Strengthen your investment literacy with CheckFirst.ca

Whether you’ve just started investing or have been on your investment journey for years, the ASC’s investor education website CheckFirst.ca provides a wealth of important information. You can find resources and tools to help you invest suitably for yourself, recognize the red flags of fraud and conduct registration checks on individuals or firms you plan to work with.

Building your knowledge is an ongoing effort, which is why the ASC shares a new CheckFirst article each month covering an investing concept, misconceptions about investing, investment fraud trends and frequently asked questions. Even better, you can subscribe to the CheckFirst newsletter for the latest articles, investor alerts and upcoming investor education programs in the community.

Explore the ASC’s 31 Days of Investment Fraud throughout March

common investment scamsIn recognition of Fraud Prevention Month, the ASC recently started sharing its new 31 Days of Investment Fraud resources. Every day of the month, the ASC will highlight a common investment fraud scam or red flag and detail how Albertans can safeguard their money.

Alongside this information, found on CheckFirst.ca/Fraud_Prevention, visitors can test their knowledge with the Don’t be fooled by fraud quiz and download or print the complete 31 Common Investment Scams and Red Flags infographic. This infographic gives investors a comprehensive list of what to look out for when it comes to investment scams and how to best avoid them.

Throughout March 2024, visitors who explore the page and subscribe to the CheckFirst newsletter will also be entered in a draw to win one of three pre-paid MasterCards worth $150.

Building your investor knowledge and leveraging the free tools and resources provided by the Alberta Securities Commission can be a strong combination to protect yourself. Remember, if you are suspicious about an investment you were offered or believe you or someone you care for was a victim of an investment scam, contact the Alberta Securities Commission. You can contact the ASC public inquiries at 1-877-355-4488 or email [email protected].

Four steps to building financial resiliency into your investing journey

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For many new and experienced investors, it can be challenging to invest and work to achieve financial goals while managing the rising costs of daily life. However, developing certain behaviours and processes in relation to your money can help you stay on track as well as build your financial resiliency. These steps hopefully mitigate stress and help you weather the storm of rising costs.

November is Financial Literacy Month, a time when Canadians are reminded to strengthen their financial knowledge and resilience. The following four steps can help you become more financially resilient.

  1. Practice financial self-awareness
    When times are tough, ignoring your financial situation and maintaining your current spending habits can be comforting. However, this feeling of comfort may be short-lived though, as uncertainty can become a source of anxiety. Instead, practice financial self-awareness by staying mindful and fully engaged with your finances. By assessing your income, expenses, savings, investments and debts, you can better understand where you can cost-cut, which debts to pay off sooner, and how to rebalance your spending towards necessities and long-term goals.
  2. Recognize what you can and can’t control
    It is critical that you recognize that certain factors – such as interest rates or a possible economic recession – are beyond your control. However, building a plan that factors in worst-case scenarios can help make you feel empowered when times are unpredictable. For instance, if you’re worried about the market heading for a recession, consider the time horizon of your investment goals and if you are well-diversified to reduce the risk you are taking on. If you need more assistance with your financial planning or reviewing your investment portfolio, a certified financial planner or registered investment advisor can help you better plan for the future.
  3. Create and maintain an emergency fund
    An emergency fund is a savings account dedicated to helping you cover life’s unforeseen costs without having to draw from high-interest debt options such as credit cards or selling your investments early. One of the best ways to establish an emergency fund is to start small, setting aside a small portion of every paycheck into a savings or high-interest savings account. Over time you can automate them through your bank or credit union, or even increase your contributions as your budget allows. Creating an emergency fund equivalent to three to six months of your typical expenses can provide you with peace of mind that you can sufficiently cover most emergency costs.
  4. Prioritize paying down consumer debt
    Consumer debt, such as credit cards and the negative compound interest they generate, can limit the money you have available for day-to-day life as well as your ability to save and invest. Only paying the required minimum on your credit card will help you avoid additional late fees, but will only pay off a fraction of the principal loan. Worse, ignoring your debt can compound the interest. For example, if you did not make any payments on a credit card with an interest rate of 24.99 per cent (the annual percentage calculated daily and charged on any balances carried from month to month), the amount you owed would double after just four years. Paying down your debt frees up your future earnings so you can use them elsewhere.

Building financial resilience takes time and conscious effort, but developing healthy habits now can pay off for years to come. This November, take small steps – track your spending, start an emergency fund and/or make a plan to pay down debt.

Three tips to becoming a better investor this fall

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October marks Investor Education Month, a time when Canadians are reminded to strengthen their investment literacy. Whether you are a new or experienced investor, refreshing yourself with our top tips and the fundamentals of wise investing can help you avoid poor performance, common mistakes and fraud.

  1. Consider where you are getting your investing advice
    Investors today are inundated with news, speculation and excitement across traditional, social and digital channels on what to invest in or how to invest. Before putting your money into any recommended investment or changing your current investing approach, consider the qualifications and knowledge of those providing the recommendations. One of the greatest things you can do as an investor is to stay focused on your investing plan. Use diligent research into the fundamentals of the company you are planning to invest in, including its profitability, debt obligations and return on equity. Understanding the fundamentals and relying on information from qualified experts using publicly available data can help you make a more informed decision and avoid fraud.
  2. Pay yourself first
    Investing consistently over time, regardless of whether the share price of an investment is up or down, is one of the best ways to reduce your average cost per share over time. Avoid the costly mistake of trying to time the market or not investing at all. Automating your contributions to your investment accounts is an easy way to remove the decision of when to invest and turn investing into an ongoing and sustainable habit. Some trading platforms may even allow you to set rules for automatically purchasing investments once your contributions reach your accounts.
  3. Reinvest your dividends
    Some single stocks and investment funds offer dividends to their shareholders. Dividends are a share of a company’s profits paid to shareholders either monthly, quarterly or annually based on the number of shares they hold. Investors wanting to maximize the compounding effect of their investments can apply for a dividend reinvestment plan (DRIP) with the financial institution, firm or trading platform they use, for any dividend-producing investments in their portfolio. With a DRIP in place, any dividends received from an investment equal to or greater than the investment’s share price will automatically purchase more shares for you at no extra cost. This reduces the cost of placing trades and further compounds your investment earnings over time.

Improving your investment knowledge on an ongoing basis can play a significant part in helping you reach your financial goals and avoid fraudulent investment scams. Check our Fraudster’s playbook to learn more about avoiding fraudulent investment scams.

Artificial intelligence: What to consider before using it for investing

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Artificial intelligence (AI) has gained significant traction across various industries, including financial markets, promising increased efficiency and data analyzation. AI has also found a prominent role in our day-to-day lives, being used to enhance search engines capabilities and in AI-enhanced chat bots that deliver answers to questions or requests based on data sets that they are trained on.

With the growing interest in AI, some investors are looking to AI’s evolving technology for investing guidance. Before you use AI tools for investing, it’s important to understand its limitations.

Here are some things every investor should consider before investing with the help of AI:

AI is not a replacement for researching investments

While AI is a ground breaking technology, it does not replace the critical step of researching and qualifying an investment. AI chatbots like ChatGPT, OpenAI and Chatsonic are classified as large language models (LLM). This means they process vast amounts of select data sets from the internet and provide a response to your query based on probably word and phrase associations.

LLM AI relies heavily on historical data and may not provide real-time financial and investment analysis or guidance. Understanding past performance can be helpful information but it is never a guarantee of future performance.

Investors should take the time to thoroughly review the company they plan to invest in including the latest information and fundamentals like their business plan, operational information and milestones.

 

AI lacks human intelligence or the experience of registered investment professionals

Everyone has a unique investing journey. Constructing your investment portfolio comprises understanding your financial goals, time horizon and your risk tolerance. AI investing bots lack the emotional intelligence and human intuition to factor these important elements into their recommendations when asked.

Based on how the AI chatbot was coded and the types of data sets it was trained on to source answers, biases could also be present in its responses, favouring a particular approach or recommending only a limited number of investments to inquiring investors. Investors should look to registered financial advisors to receive a comprehensive and personalized assessment, and investment services when needed.

 

Be wary of AI chatbots that direct you to invest on a specific platform

With the growing excitement around the technology, fraudsters promote AI investing bots and apps they say can provide guaranteed or high returns with little to no risk to investors. Be mindful that these types of advertisements are a common red flag of fraud.

One of the best ways to avoid fraud is to confirm that the trading platform you plan to use is registered with the securities regulator in the province or territory you reside. Registration confirms that the individual or firm is properly qualified and comply with investor protection laws.

You can check the registration of any individual, firm or trading platform on our Check registration page.

Advancements in AI has undoubtedly transformed how we obtain, analyze and use information. While AI can provide helpful investment ideas, when it comes to making investment decisions, there is no replacement for the qualified services of registered investment professionals and your thorough research of investments to ensure they align to your goals and risk tolerance.

Treat using AI for investing as a helpful tool but not a substitute for due diligence.

Know your limit and invest within it: Understanding your risk tolerance when investing

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Understanding the level of risk you are willing and able to take with your investments is critical to your success as an investor. All investments come with some degree of risk; the higher the potential return of the investment, the higher the risk that you may lose some or all of your money. Understanding your personal risk tolerance and factoring it into your investment decisions can help you make suitable investments.

How can I determine my risk tolerance?

Risk tolerance is a measure of your ability and willingness to take risks with your money, with the understanding that the performance of your investments may not achieve the expected results. Whether you started investing in your 20s or nearing retirement, everyone has a different risk tolerance that gradually changes over time as they enter new life stages. Your personal preferences also change as you approach your financial goals.

When working with a registered financial advisor or a robo-advisor, a Know Your Client (KYC) form must be filled out before you begin investing. KYC forms play an important part in your investing journey by aiding financial advisors and robo-advisor services to better understand your risk appetite and the suitability of recommended investments. If you are planning to do self-directed investing, it is essential to personally assess your risk tolerance before starting. One tool that is available to help you is the Check Your Risk Tolerance quiz.

Tips to keep your investment portfolio in check with your risk tolerance

Whether you are a new or experienced investor, continually paying attention to and considering your risk tolerance is essential for long-term investing success.

1) Reassess your risk tolerance annually: Your life changes over time and so does the level of risk you want to be exposed to. Consider filling out a new KYC form with your advisor, retaking the CheckFirst quiz every year, or if you reach a new life stage, like getting married or nearing retirement.

2) Be honest with yourself: Investing is a personal journey and requires you to be open and honest with yourself and the investment professionals you work with on the level of risk you are willing to take. For instance, consider if you were to see a hypothetical 50% drop in your investment portfolio value. Reflect on your emotional and financial state if that were to happen and from this place, you will be able to more accurately answer KYC forms and thoughtfully consider high risk investments.

3) Think about your goals: The length of time you expect to hold your investments before withdrawing funds can be an important factor in determining the level of risk you take. Generally, the longer your time horizon, the more risk you can take, as you will have more time to recover if your investment underperforms for a period. The shorter the timeframe, the less risk you may want to take to preserve what you have invested.

4) Adjust your portfolio if it no longer falls within your risk tolerance: As your risk tolerance changes over time, your investments should re-align with it. If you are working with an advisor they can help adjust your portfolio to better represent your risk level. If you are investing on your own, consider how you can slowly adjust the level of risk within your portfolio by using appropriate risk-aligned investments.

Investing without considering your risk tolerance can lead to poor performance and ill-suited investments for your financial goals. By assessing your risk appetite throughout your investing journey, you can confidently build a portfolio to best meet your financial goals and comfort level.

Thinking ahead: Understanding the benefits of using a certified financial planner

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For new and experienced investors, your financial plan is one of the most important elements of your investing journey. A financial plan is a document that outlines your current financial circumstances, your short, medium and long-term goals and the steps you will take to accomplish them. A financial plan can also help you plan for and manage risks, including health or disability needs, job loss, and debt repayment.

Thoroughly evaluating your income, expenditures, savings, and debts and mapping out your expectations for the future is essential to constructing a comprehensive and realistic financial plan. While creating a financial plan can be done on your own, many seek out the expertise of a certified financial planner.

A certified financial planner has a thorough knowledge of personal finances and can help clients of all ages develop a plan to reach their goals and maximize the efficiency of their assets.

Let’s explore common scenarios where using the services of a certified financial planner might be right for you.

Not knowing where to start

Drafting your financial plan can feel daunting, and relying on a trusted fiduciary (someone obligated to work in your best interest), like a financial planner, can help you get started. Financial planners are trained to develop a diversified and suitable investment portfolio; provide retirement, estate and tax planning services, and insurance and debt management recommendations. Financial planners can get you started on the right foot by helping you better understand where you are currently and the optimal way to get to your financial goals while outlining additional factors in your planning you may not have considered.

Dealing with significant life events

Earning a promotion at work, getting married or divorced, and receiving an unexpected inheritance from a loved one are significant life events which can impact your finances and future goals. A financial planner can help you assess the changes in your life and begin charting out a plan of action that allows you to best meet your financial goals under your new personal and financial circumstances.

Preparing for retirement

Saving for retirement is an important goal for many Canadians. Knowing approximately how much you and your spouse will need in 10-20-30 years can be challenging to determine and even more so if you plan to retire early or with a desired retirement income. Financial planners can take a detailed account of your assets, including real estate, investments, debts, savings, work pensions and access to government benefits like the Canadian Pension Plan, Old Age Security, and the Guaranteed Income Supplement to formulate a comprehensive financial plan which includes recommended withdrawal limits during retirement to ensure your nest egg lasts through your golden years.

Having a sound financial plan can play a big part in helping you reach your goals. Whether you want to focus on a specific area of your life, like investment planning or simply want a new perspective from someone with the knowledge, skills, expertise and ethical obligations, a financial planner can be a valuable partner in your financial planning journey.

To learn more about certified financial planners and how to find a financial planner for your needs, visit FP Canada.

Saving and investing towards your first home with the new Tax-free first home savings account (FHSA)

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In a January 2023 poll conducted by The Harris Poll on behalf of NerdWallet, nearly two-thirds of Canadians (67%) listed owning a home as a priority. For those with the financial goal of buying their first home, the Canadian government introduced the Tax-free first home savings account (FHSA) on April 1, 2023, to help Canadians over 18 save and invest towards home ownership.

The FHSA is a registered plan that allows you to save and invest up to $40,000 tax-free toward your first home purchase. Learn what you should consider before opening an FHSA account.

1) The FHSA offers the best perks of the RRSP and TFSA

The FHSA takes the best benefits of a Registered retirement savings plan (RRSP) and a Tax-free savings account (TFSA). Your contributions to your FHSA within a particular calendar year will also reduce your taxable income when you file your tax return. Unlike RRSPs, where your withdrawals are taxed as income, withdrawals from your FHSA to purchase your first home are tax-free, including all the investment income you may have generated in the account, like a TFSA. This allows you to maximize your savings towards your first home purchase while minimizing income tax.

2) The FHSA has annual contribution limits and qualifying withdrawals

For those wanting to use this newly registered account, the Government of Canada imposed limitations on how much you can save and invest in your FHSA before incurring penalties. Starting in 2023, Canadians can contribute up to $8000 in their FHSA yearly, with any unused contribution amounts carried forward to a max of $8000. Over-contributing to your FHSA will incur a 1% tax on the over-contributed amount each month unless brought below contribution limits.

To make a qualified tax-free withdrawal or series of withdrawals, you must be a first-time home buyer when you make the withdrawal(s). To qualify as a first-time home buyer, you must not have lived in a home you owned at any time during the part of the calendar year before the withdrawal is made or at any time in the preceding four calendar years. Any non-home related purchases may result in withdrawals being treated as taxable income.

3) You can combine your FHSA savings with the Home buyer’s plan

Before the FHSA was introduced, Canadians could use the Home buyers plan (HBP) to pay for a down payment. The HBP allows you to take up to $35,000 from your RRSP without taxation for your first home purchase. Any amount withdrawn through an HBP must be paid back to the RRSP within fifteen years or you lose the contribution amount from your RRSP and it is treated as taxable income. Combining the use of both accounts, potentially gives you access up to $75,000 in savings and investments towards your home purchase.

Saving and investing toward your first home purchase can be challenging, but leveraging the unique benefits offered by the newly introduced FHSA can help you reach your goal quicker and more efficiently than any other registered plan or account currently available.

Staying ahead of investment scams in 2023

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March is Fraud Prevention Month, a time when Albertans are reminded to brush up on their knowledge of investment scams and fraud to better safeguard themselves and those they care for. One of the most prevalent types of fraud is investment scams, which impacts experienced and new investors alike. In a recent study conducted by the ASC, 48% of Albertans believed they had been approached with a potentially fraudulent investment opportunity.

By understanding the tell-tale signs of fraud and remembering the fundamental principles of making suitable investment decisions, Albertans can recognize, avoid and report investment fraud and financial abuse. Remember the following red flags to safeguard your savings or those of someone you care about from an insidious investment scam.

Leveraging fears or anxieties

A go-to tactic for scam artists is tapping into the financial stressors you (their target) may have. This could include the anxiety of not having enough for retirement, leaving a legacy for loved ones or the fear of missing out on great investments. Regardless, be mindful of anyone trying to tap into your fears or anxieties when offering an investment. It is important to pause and do your research before making any investment decisions. Do an online search to see if there are any news articles, social media posts or disciplinary actions taken against the individual or company. Even if the offer isn’t fraudulent, it may not be right for you so it’s important to understand it and its risks.

New friends or love interests taking an interest in your financial wellbeing

As we connect with friends and family and make new friendships, be wary of any new person in your life who takes an immediate interest in your finances. Fraudsters often work hard to establish trust, learn the fears or anxieties you may have, understand how much they can steal and how to manipulate you. Be sure to create boundaries and do not share your personal financial information or anything about your private matters. Also, be mindful of the personal information you share about yourself online – adjust your Facebook, or other social media account settings to “private”, and carefully consider any friend requests. Don’t share personal or financial information with anyone you’ve just met online or in-person unless you can verify their identity and have thoroughly researched any financial offers they’ve given you.

Investment offers from unregistered individuals

By law, anyone selling investments in Alberta should generally be registered with the ASC. Check to see if the firm or individual pitching the investment opportunity is registered by checking the Canadian Securities Administrators’ (CSA) National Registration Search. If the investment offer comes to you from a friend, ask where it originated from and ensure the individual or firm that offered it to your friend is registered. Contact the ASC if you suspect it may be a fraudulent investment or need assistance in confirming registration.

Exclusive offers

Investments promoted as exclusive offers just to you is a clear red flag of fraud. Scam artists often try to take advantage of those interested in investing by promoting opportunities to “get in early,” or claiming that unless you move fast, you are going to miss out on the latest trend or great “opportunity” to make money. Exclusive or time-sensitive offers drive false urgency and prevent you from researching and talking to others about the investment. Investments will always be available, and no credible financial advisor should ever rush you into a decision.

Growing your investor knowledge can help you recognize, avoid and report investment fraud. If you are interested in learning more about how to stay safe and protect yourself from fraud, consider attending a virtual or in-person Fraud Prevention Month event. If you are interested in attending a free event this month, please visit our events page.

If you feel you or someone you care for may be involved in an investment scam, do not let the embarrassment or fear keep you from speaking up. You can contact or file a complaint with the ASC or call us toll-free at 1-877-355-4488.

Keeping romance scams out of your online social and dating life

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For many in today’s increasingly connected online world, using apps and social platforms to connect with others has become convenient and common. As of 2021, eHarmony, a popular online dating platform, reported that 36% of Canadians use online dating platforms. Unfortunately, with the popularity of dating apps and social media, fraudsters are increasingly using them to scam Canadians. According to data from the Canadian Anti-Fraud Centre, romance and investment scams were among the country’s top forms of fraud. Last year alone, Albertans lost $4.5 million dollars to romance-related scams. Fortunately, there are steps you can take to safeguard your personal information and recognize, avoid and report these types of scams.

What are online investment and romance scams?

One of the go-to tactics of fraudsters is to tailor their scams to potential victims. Social media platforms can offer a wealth of valuable information – public profiles or posts can share insights into your location, interests, friends, and family members, all of which can help the fraudster craft a convincing and tangible story around their scam. Fraudsters can even impersonate someone the victim trusts, such as a friend or family member, to offer investment opportunities. In a 2020 Investor Index conducted by the Canadian Securities Administrators, 1 in 4 Canadians stated that they were more likely to trust an investment opportunity if it was recommended by someone they knew. In addition to social media, scammers patrol online groups and dating sites, seeking to establish trusting friendships or romantic relationships with potential victims to manipulate them into investing in a scam. They may pressure individuals to invest, guarantee high returns with little risk, and even convince the victim to continue investing over time, leading to substantial losses.

Protecting your social media profiles from investment fraud and romance scams

There are steps you can take today to protect yourself from investment and romance scams on social media and dating apps.

  1. Limit the amount of publicly available information about yourself online. This can be done by adjusting your privacy settings on these platforms.
  2. Be highly skeptical of unsolicited investment offers, especially from those you have just met.
  3. If an offer comes from a friend, family member or someone you trust, consider checking the offer’s legitimacy by contacting the individual by phone or in-person.
  4. Watch for the most common red flags of fraud, including pressure to invest, guarantees of high returns, and investment offers in cryptocurrencies.
  5. Do not take up investment offers from someone not registered with the Alberta Securities Commission.

While social media and dating apps have made it easier for individuals to connect, they also provide opportunities for scammers to target unsuspecting victims. By being aware of the tactics used by scammers and taking steps to keep your personal information private, you can better protect yourself from falling victim to online investment and romance scams.