Is remote access technology safe? How to protect yourself from the makings of an investment scam

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We’ve all received those suspicious messages: a text from your favourite online shopping company claiming your package is stuck or an email seemingly from Canada Post asking you to click a link to reschedule delivery to a package that you never ordered. These tactics might seem cliché now, but these prompts are the beginning of a scam.

But what if the scam was more sophisticated?

Imagine scrolling through your social media feed. You come across an advertisement for a risk-free investment with incredible returns. Intrigued, you click the ad to learn more. Soon, you find yourself on a call with a company representative. They walk you through setting up an “investment” account and since they can’t be there in-person to assist you with investing, they politely ask you to share your screen. This could be the start of a scam.

Earlier this year, the Canadian Anti-Fraud Centre (CAFC) warned Canadians of a rise in investment fraud. According to the agency’s annual report 2022, investment scams were the leading fraud category with the highest dollar loss. In most of the reported cases, the scams were cyber-enabled, with remote access or screen sharing becoming a common element to the scams.

 

What is remote access, and how does it work?

Programs like AnyDesk, Iperius Remote and TeamViewer are legitimate tools that allow a person to access your device from anywhere in the world. Once enabled, the software allows you to share your screen with a third party, granting them complete control over your computer, including private data, files, and passwords. In most cases, legitimate companies use this software to provide services, especially IT support.

But this is where scammers can slip through. Conmen can exploit this technology to steal private information or guide you toward fraudulent investment websites. Many times, the victims don’t even realize that a scheme is in play.

 

What is an AnyDesk or screen-sharing scam?

While all investment scams have similar warning signs, the methods used to engage you can be complex and varied. AnyDesk scams may often begin with social media contact. This first interaction could be in the form of an ad on your social media feed, a direct message or even an unsolicited call promoting a seemingly too-good-to-be-true opportunity.

To establish credibility, the fraudster may even use AI to generate text, manipulate images and videos to  fabricate a investment website that looks genuine.

Once contact is established, they work quickly to build trust, offering to educate and assist you during your investment. This tactic involves social engineering and manipulation, where the scammer is readily available to provide support and answer all your questions. Their next step is usually when they deploy remote access software like AnyDesk to “walk you through the process” of investing with them.

 

How to spot the red flags of a remote access scam

These scams often involve complex investment concepts like crypto or Forex trading. Scammers exploit a lack of knowledge and jurisdictional complexities to craft an elaborate plan. As part of their trust-building scheme, they may fake returns on your money and even allow small withdrawals to entice the victims to invest larger sums.

Here are common red flags:

  • High-pressure tactics: Creating a false sense of urgency is a crucial component of these scams. Pressure and stress tactics are meant to keep victims from questioning the opportunity or thinking critically. Look out for phrases like “no-risk”, “guaranteed returns” and “once-in-a-lifetime opportunity.” Remember, if an investment offer elicits an emotional response, take a step back.
  • Request to share screen: Personal information, including financial details, should always remain private. Never grant access to anyone who contacts you. Share your screen only if you initiated contact and it is with organization you trust, such as your workplace or an authorized service provider for IT support. Legitimate investment platforms, government organizations, or banks will never request remote access to your device.
  • Demands to borrow money to invest: A request to borrow money for investments is suspicious. Borrowing to invest is high-risk, and legitimate registered financial advisors discourage this behaviour. If someone pressures you to borrow funds for an investment opportunity, be wary of a potential scam.

 

Can money or crypto lost to an investment scam be recovered?

Studies have shown that investment scams increasingly involve an element of crypto, making recovery difficult due to its untraceable nature. Recovering traditional money transfers can also be challenging, as scammers often operate in foreign jurisdictions and use multiple fake accounts to wire money.

Are there legitimate crypto recovery companies?

While some legitimate recovery services might help with data or password recovery, many crypto recovery services could be another scam.

In a “recovery room scam,” fraudsters target previous investment scam victims with false promises of recovering lost funds for a fee. If you are someone who has fallen victim to a scam, be wary of bad actors offering to recover your money for a fee.

 

Before you invest:

  • Check the Investment Caution List: The ASC maintains a database of individuals, companies, and websites that may pose a high risk to investors. Firms or individuals mentioned on this list may be involved in fraudulent schemes.

 

How to report an investment scam in Alberta

If you’ve been scammed and lost crypto or money, recovering the funds is difficult. However, there are a few steps you can take.

  • Contact the Alberta Securities Commission: Reporting scams to the ASC as quickly as possible helps us disrupt, stop and prevent future harm. If you suspect you or someone you know has lost money to an investment scam, file a complaint with the Alberta Securities Commission via email [email protected] or call us at 403-355-3888.

Technological advances like remote access software may make life more convenient, but they can also be exploited by bad actors. By staying informed, you can help protect yourself and your loved from falling victim to deceptive tactics.

3 common misconceptions about investing and how to overcome them

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For many Canadians, investing can seem intimidating or out of reach. Misconceptions, often fueled by jargon, fear or misunderstanding can lead them to either avoid investing entirely, make risky decisions or worse, fall victim to investment scams.

While investing is a continuous financial journey, understanding the basics and starting with strong fundamentals can set you up for success. Here is a look at some common misconceptions about investing and how you can reframe your thinking:

 

Misconception #1: Investing is like gambling

Pop culture often portrays investing as a fast-paced, high-risk thrill ride. This narrative fuels the long-held belief that successful investing solely involves day trading and playing the market odds for quick profits. For some, this portrayal may seem similar to gambling and can scare them away from investing or lead them to invest in high-risk and unsuitable opportunities.

Though all investments carry some degree of risk, planning an investment strategy with long-term goals vastly differs from gambling for three main reasons:

  • Time horizon vs right now: Gambling focuses on immediate results while investing takes a long-term view of growing money over extended periods of time through compounding interest. Emotions and adrenaline shouldn’t dictate investment decisions. With a financial plan in place, investors can approach investing in a mindful and strategic way.
  • Informed choice vs chance: Long-term investing considers crucial financial information about the stock, company or fund. You can study a company’s earnings reports, products and services, and leadership before committing to investing your money. In contrast, gambling is simply betting your money on the odds and a healthy dose of luck.
  • Ownership vs all-or-nothing: When you invest money into buying a stock, mutual fund, or ETF, your purchase gives you partial ownership of a company. The return on your investment is never an all-or-nothing scenario like in gambling. Investments can deliver returns in the form of interest, dividends, or capital gains. Diversifying your assets to include low-risk options like GICs, bonds, or a basket of investments through a mutual fund or ETF can further help manage risk

 

Misconception #2: Investing is only for the rich

This is by far the most common barrier to investing. According to CIRO’s 2024 Investor Survey,  six-in-10 non-investors identified not having enough money to invest as one of the things holding them back from investing. For many Albertans, finding room in your budget for investing may seem like a privilege. But modern-day investing has come a long way and is much more affordable.

Gone are the days of expensive stockbrokers and minimum investment requirements. Thanks to advancements like robo-advisors, low cost brokerages, fractional shares and ETFs, you could start investing with as little as $1. Today, the ability to start investing has minimal financial barriers.

An interesting statistic from Ramsey’s 2024 National Study of Millionaires showed that most U.S. millionaires did not inherit any money from their parents or family members. According to the survey, eight out of 10 millionaires came from middle-income or lower-income families. In the same study, three out of four millionaires stated regular consistent contributions lead to success.

Even small investments are worthwhile! Investing can start with small amounts based on your budget and increase as you earn more or are able to allocate more towards your long-term goals.

 

Misconception #3: It’s too late to invest

The goal of any investor is to maximize profits and earn the best return on their investment, while staying within their risk tolerance and time horizon. A longer time horizon allows your money to compound and grow over time faster. But, this thinking can lead some to believe they’re too late to invest or need to take on excessive risk to catch up.

This isn’t the case. Three key lessons that are critical to your success as an investor involves understanding:

  • A financial plan: Regardless of age, having a financial plan in place can help you consider realistic goals and accurate timelines for when you can achieve them. Certified financial planners can help you create an action plan taking into consideration your age, current financial obligations, and risk tolerance.
  • Time in the market: Time spent invested and in the market is generally better than time spent staying on the sidelines. Remember, the power of compound interest works regardless of when you start investing.
  • Risk and return: Taking on more risk doesn’t guarantee a higher return. Know your personal risk tolerance. This will help ensure you choose suitable investments aligned to the risk you are comfortable taking.

 

Like the ancient Chinese proverb, the best time to plant a tree was 20 years ago. The second best time is now.

Common misconceptions can skew how you view and approach investing. With a measured approach and a strong foundation backed by investing principals like diversification, risk vs. reward and compound interest, you can start your investing journey on the right path today.

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] 

Is crypto a good investment? Understanding the risks and rewards of crypto

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After a bleak 2022-2023 marred by controversy and fraud, crypto is back in the spotlight. Driven by news including headlines of the launch of US-based spot ETFs, and evolving regulatory developments, this digital asset has seen a surge in valuation, attracting investors looking for alternative investments.

A recent 2023 study by KPMG highlighted that Canada’s investment sector was warming up to crypto. The report found that 22 per cent more of the surveyed financial services providers in Canada offered crypto-asset services than in 2021.

However, crypto’s potential for higher returns comes with a significant risk of greater losses. Unlike conventional investments, the very features that make crypto appealing also makes it inherently risky. And this risk extends beyond price volatility — including vulnerability to scams.

Understanding the basics of crypto, the associated risks and what makes it an easy target for scammers is crucial for anyone considering entering this fast-changing market.

What’s the idea behind crypto?

Cryptocurrencies are part of a wider movement to create a financial system that is open, borderless, decentralized and immutable. Proponents of crypto believe that the system would foster a culture of financial transparency and collaboration that allows for rapid innovation and development.

While commonly called ‘cryptocurrencies,’ the term can be misleading. In Canada, cryptocurrency is not recognized as legal tender under the Currency Act. The term ‘crypto-asset’ more accurately encompasses the common types of digital assets you might encounter, including utility tokens, payment tokens, virtual assets, digital currencies, or stablecoins.

 

Is crypto trading legal in Canada?

Trading crypto is allowed in Canada, but not all crypto assets are considered securities. But this does not mean that investor protections offered by securities laws do not apply to them.

To safeguard Canadian investors, starting in January 2020, the Canadian Securities Administrators (CSA) asserted jurisdiction over Crypto-Trading Platforms (CTPs), commonly known as crypto exchanges, operating in Canada. As a result, all CTPs in Canada must be registered with the Alberta Securities Commission or another provincial securities regulator.

 

Crypto’s benefits and risks

Over the years, crypto’s rise to prominence can be attributed to several factors. First, its decentralized nature allows for peer-to-peer transactions without the oversight of a trusted third party like a traditional financial institution. Cutting out central authorities overseeing transactions reduces fees and speeds up processing times Secondly, due to its highly speculative nature, investors may be drawn to the potential for higher profits, using it as a way to diversify their portfolio or make quick short-term gains.

But this allure also brings inherent risks.

 

Why is crypto prone to scams?

Decentralization and lack of regulatory oversight: The principle of decentralization is foundational to crypto. However, the lack of oversight can also weaken investor protections.

Investors often use crypto exchanges to buy or trade crypto. In Canada, any platform trading crypto-assets must be registered with the ASC or another provincial Canadian securities regulator. Unregistered platforms might not comply with securities law, including providing false information and lacking investor protections like secure client fund handling, safekeeping of client assets and measures against market manipulation.

Also, given the borderless nature of crypto and the advantage of anonymity, in case of fraud, crypto sent to unregistered platforms located in foreign jurisdictions may never be recovered.

Price volatility: Crypto is known for its frequent and significant price fluctuations. These extreme swings often attract investors hoping for quick, short-term gains. However, the highly speculative nature of the asset class, heavily influenced by market sentiment, also creates opportunities for scammers to deploy their schemes.

While scammers often repurpose traditional investment scams like pump and dump or ponzi schemes by including a crypto element, common crypto scams include:

Rug Pulls: Rug pulls, which get their name from the expression “pulling the rug out,” involve attracting investors with a new crypto project and pulling out all funds before the project is built, leaving the investors with no balance in the pool. These scams can sometimes include elements of a Ponzi scheme, where investors profit by recruiting other users with false financial promises.

Fake Initial Coin Offerings (ICOs): Fraudsters frequently create fake ICOs, where a new crypto product is launched and sold to investors. These fake ICOs may have professional-looking websites and whitepapers, but ultimately offer nothing of value, leaving investors with nothing but empty promises.

 

How to invest in crypto in Canada?

Before committing to putting your hard-earned money into an investment, either traditional stocks and bonds or crypto trading, always Check First.

Check: if the investment suits your risk tolerance; if the crypto asset trading platform you choose to use is registered with the Alberta Securities Commission; and if you understand the business.

As every crypto enthusiast knows, thorough research, referred to as “doing your own research”  DYOR is critical. It can help you understand the risks and opportunities, invest suitably, and avoid scams.

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].

Romance Scams: Protect yourself from online investment fraud

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The new love interest you have been texting over the last few months – the one you met on social media – has had to cancel your online video date due to a work emergency. You’re disappointed because this is a recurring pattern. But, you push aside your feelings of frustration. After all, this person has been helping you learn how to invest and take control of your finances. They’ve even shared an investment opportunity with you that they claim earned them incredible returns in the past. You think to yourself, “If people can find their significant other online, maybe this could work out for me too. And the returns on investments, that’s a nice added benefit.”

Stop. Check first. This could be the start of an online romance investment scam.

According to the Canadian Anti-Fraud Centre (CAFC), romance scams were responsible for some of the highest financial fraud losses in 2023 — costing 945 victims more than $50 million.

 

What is a romance scam?

romance scam phone

Romance scams often involve social engineering tactics. Here a fraudster quickly builds an online relationship with the target, and then leverages the trust formed and any personal information they obtain to con the victim out of money.

Regardless of the platform where the scam originates, fraudsters follow similar patterns of trust-building through regular communication and declarations of love or friendship. Then comes the requests for money for an investment opportunity. Oftentimes, these investment offers can be tied to crypto or promises of significant returns with little or no risk.As millions of Canadians continue to use social media and dating apps to seek new friendships and romance, these types of investment scams are becoming increasingly common.

Here are some tactics and schemes that you should be on the lookout for:

Fake profiles and catfishing

Catfishing, or using fake online identities, has long been a tactic used by fraudsters. These scams usually involve an attractive, but fake profile, designed to entice victims into an online relationship.

Con artists even use new technology like AI to manipulate images, videos, and voice to create a seemingly credible persona. Catfishing scams typically feature a profile that seems unrealistically perfect, like excessive wealth and good looks, an extravagant lifestyle and unfettered success.

One of the ways you can spot if the images on a profile are AI-generated is by looking for unrealistic symmetry in a person’s face or magazine-like beauty. A reverse image search can also help check if a picture is stolen or used by multiple accounts.

Military or oil rig scams

This scam is a variation of catfishing. It targets Albertans by exploiting their trust in established institutions or companies, like the military or an oil company.

Scammers take advantage of the victim’s lack of knowledge about protocol for military personnel or oil rig workers when crafting these scams. Fraudsters typically claim to be dealing with a banking issue due to being deployed overseas. They request help with finances for an investment opportunity that will result in quick and guaranteed returns for both of them.

Frequent excuses like avoiding video chats due to security or network problems at their remote work location is a common red flag.

Financial grooming or pig butchering

Unlike many romance scams that develop rapidly, financial grooming is often a long term and predatory scheme. This scam, often referred to as “pig butchering”, usually combines elements of a romance scam and crypto investment fraud.

In this tactic, the fraudster grooms the victim over months before encouraging them to start crypto trading. They may even offer to “manage” the crypto investment on behalf of the victim and request additional funds to be provided for a greater return.

Scammers often create fake return statements on investments to establish credibility. They may even pay early but fake returns —  prompting the victim to invest larger and larger sums of money. In most cases, victims only realize they have been defrauded when they try to withdraw their funds and are denied or ignored by the fraudster.

 

How do you know if you’re being scammed?

Typically, a romance scammer will try to move the relationship forward as quickly as possible. They employ a technique called “love bombing”, where they shower victims with extreme displays of attention and affection. The con artist may also try to establish trust by sharing “personal” details about their lives right at the beginning of a conversation.

The next step in their con is the suggestion to move your conversation to personal messaging apps. Scammers use apps like Google Chat, Snapchat, and Telegram to prevent their dating profiles from being reported.

Common red flags of a romance-based investment scam are:

  • A new acquaintance you met online who claims to have insider knowledge about profitable investment opportunities.
  • Directions from an online friend or acquaintance to use a specific app or platform to make investments.
  • Pressure to invest immediately or lose out on a once-in-a-lifetime opportunity.
  • Requests for remote access to your device to “teach” you how to invest.
  • Immediate and escalating interest in your finances.

 

Reporting a romance scam:

Fraud costs Canadians millions of dollars each year. Despite the staggering impact of these scams, we know that fraud is grossly underreported as only 5-10 per cent of victims file complaints.

Remember, regardless of age, investment knowledge, or level of wealth, anyone can fall victim to an investment scam. If you believe you have been the victim of a romance-based investment scam, report it to the Alberta Securities Commission (ASC). You can register a complaint online or call us at 403.355.3888.

Want to learn more about the tactics employed by fraudsters? Check out our Fraudster’s playbook resource

 

Top 3 crypto scams of 2024: Protect yourself from social media, romance and recovery room scams

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2023 was a year that saw the crypto industry marred by controversy. Beginning with the collapse of FTX to the more recent money laundering charges against Binance’s Changpeng “CZ” Zhao, there have been many scandals and frauds plaguing the industry.

As we move into 2024, crypto scams continue to be a pressing issue worldwide, including in Canada.

The Alberta Securities Commission recently released the top crypto-related scams to watch out for in 2024. This list is based on investor complaints, ongoing investigations and current enforcement trends.

Let’s take an in-depth look at the top three scam variations that made the list and break down the tactics fraudsters use to target everyday Albertans.

Social media deepfakes and celebrity endorsements:

The explosion of Artificial Intelligence (AI) tools, like AI-generated images and voices, have made it easier for fraudsters to bait Canadians with crypto scams.

In November 2023, the Canadian Security Intelligence Service (CSIS) reported the growing economic and financial threats from artificially generated fake visuals known as deepfakes. It highlighted rising cases of fraudulent deepfake videos and images featuring well-known individuals — including that of Canadian Prime Minister Justin Trudeau, popular business icon Elon Musk and actor Tom Hanks — used in social media promotions to lure Canadians.

Celebrity endorsements, genuine or not, may seem enticing. Regardless of how convincing they look or sound, actors, models, athletes, politicians or entrepreneurs are not reliable or qualified sources of financial advice. Remember that endorsements are never a guarantee of legitimacy or investment returns.

Whether an advertisement uses a celebrity endorsement or not, promises of high returns, risk-free investing or free money are significant red flags of fraud. Always check first — anyone offering investment products or financial advice must be registered with the Alberta Securities Commission or another provincial securities commission.

Romance scams:

After the COVID-19 pandemic, dating app fraud, romance scams, and “pig butchering” have become commonplace and a topic in our social media conversations. The Canadian Anti-Fraud Centre (CAFC) observed that, despite only five to 10 per cent of such frauds typically being reported, there has been a significant uptick in romance-based investment scams in recent years. The agency received more than 650 reports of such scams between January and September 2023, with total losses estimated at upwards of $29.8 million. Closer home in Alberta, there were 70 reports of romance scams and losses exceeding $2.6 million.

While these scams are often thought of as only targeting those looking for romance, this is an oversimplification of this tactic. Fraudsters take advantage of vulnerable people looking for friendship or love to connect with potential victims. Once a relationship is established, they exploit the trust and attachment created to request money or fabricate investment opportunities, often related to crypto.

Signs of a romance or dating scam include an internet stranger expressing love or affection too soon. They may then avoid meeting in person or on video calls, and eventually ask for money, crypto or offer a crypto investment that they can invest in on your behalf. Always be cautious of new friends or acquaintances that take an immediate interest in your finances or offer investment advice.

Recovery room scams:

As interest in crypto continues to soar, fraudsters are increasingly deploying what’s called “recovery room” scams to further defraud victims.

In this type of fraud, con artists impersonate regulators, recovery agencies or law enforcement and attempt to defraud victims again under the pretext of recovering their lost crypto assets or funds for a fee. To make it more convincing, fraudster’s target these recent victims using information from the original scam.

Stay alert for red flags like fee requests and demands for banking or personal details. Neither law enforcement agencies nor the Alberta Securities Commission will ever contact you with an offer to recover your money or assets for a fee. Any unprompted communication offering to do so should raise suspicions.

Remember — recovering crypto is extremely difficult and is a long and arduous process with no guarantees. If it sounds too good to be true, it probably is.

Protect yourself:

Being aware of the red flags of fraud is crucial in an investor’s journey. There are also additional steps investors can take to protect themselves and help others:

Check registration. Albertans should ensure that any company or individual they plan to invest with is registered with the Alberta Securities Commission. You can complete your checks by consulting the Canadian Securities Administrators National Registration Search.

Stay alert. Research any opportunity thoroughly before you invest. To help, the Alberta Securities Commission maintains an Investment Caution List that includes the names of companies that are not registered with the ASC and appear to be engaging in activities that either require registration under Alberta securities laws or may be investment scams.

Know where to turn. If you suspect you or someone you know has lost money to a crypto investment scam, file a complaint with the Alberta Securities Commission via email [email protected] or call us at 403-355-3888.

Taking time to further understand common crypto scams can help you recognize, avoid and report them. Visit the crypto scams page for more information.

How to recognize the red flags of an unsolicited investment offer

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Criminals frequently use digital channels to deploy investment scams that rob Canadians of their hard-earned money every year. According to a survey by the Canadian Anti-Fraud Centre, Canadians lost more than $161.4 million to investment scams in just the first six months of 2023. While these losses are expected to surpass 2022’s total of $305.4 million, the CAFC estimates that only 5-10 per cent of frauds are reported.

One reason so many Canadians fall victim to scams is social engineering. Many times, investment scams start with an unsolicited message designed to deceive: a well-crafted introduction to build trust with the potential victim and set the stage for a “money-making opportunity”.

Some versions of these scams — such as the infamous lottery ticket or Nigerian prince schemes — have existed for decades. However, these swindles have evolved considerably over the last few years. Fraudsters are increasingly leveraging growing interest in online trading, cryptocurrency investing, and social media popularity to target Canadians.

How fraudsters use unsolicited messages to initiate a scam

A random direct message on social media or text serves as the modern equivalent of an unsolicited cold call. Messages often begin simply, like “Hi” or a more personalized greeting such as “Hey, are we still on for coffee?” This could be a fraudster trying to start a conversation.

Fraudsters who use this technique quickly build a rapport by striking up a conversation and making the victim feel like they’ve found a real friend. Scam artists will frequently use publicly available personal details, and the victim’s hobbies and interests from social media, to boost credibility and tailor their scam during this stage. Once trust is established, the scammer will introduce a supposedly lucrative investment opportunity that has earned them large returns, enticing the victim to invest as well.

In a 2023 global study by the Global Anti-Scam Alliance, 34 per cent of victims reported being “attracted to the offer made” as the primary reason for falling victim to a scam.

Signs an unsolicited investment opportunity may be a scam

One of the typical red flags of an investment scam is when a person makes claims about unrealistic returns with little to no risk. A seasoned investor or registered investment advisor will tell you that every investment comes with some degree of risk. The higher the potential return, the higher the degree of risk you may lose most, if not all, of your investment. This holds true, especially with alternative high-risk investments such as crypto.

Scammers also employ tactics of impersonation. A recent Interac survey showed that fraudsters pretended to be representatives of legitimate organizations, including government institutions and securities regulators, to deploy fake banking, credit card, and investment scams. Any unprompted communication that lacks background information about the representative or business should be considered a red flag of potential scam. Remember, requests for personal data in such communications are also a warning sign.

Fraudsters frequently use social media platforms, dating sites, messaging apps like WhatsApp, Kik, Signal and Telegram (which allow users to interact with anyone else using the app), and services like Google Chat for correspondence. These platforms allow scammers to quickly delete their profiles once a scam is complete, thereby hiding their identities.

How can you avoid unsolicited investment offers from turning into a scam?

Taking the time to check the fundamentals of any investment opportunity is crucial. Some other steps you can take to protect yourself and your money from investment scams are:

  • Be wary of any investment advice that you did not seek out yourself. Legitimate registered investment professionals and businesses generally do not conduct outreach via social media or text messages.  
  • Ignore investment offers that use words like ‘proven’ or ‘guaranteed’ investment returns. If it sounds too good to be true, it usually is.  
  • Avoid any unsolicited crypto investment opportunities offered online or through unknown individuals. Fraudsters often tailor their scams around crypto or fake trading platforms.   
  • Be cautious of unexpected investment offers that come from friends or acquaintances on social media. Fraudsters can hack or create fake accounts that impersonate those you know. 
  • Limit the personal information you share publicly on social media platforms. Fraudsters often tailor scams based on publicly available details about their targets. 
  • Stay cautious of individuals pushing ‘time-limited’ opportunities. These types of offers are meant to create a sense of urgency to prevent you from researching the investment and the person or firm offering it.  
  • Commonly, fraudsters will direct potential victims to cloned websites by mimicking trusted brands. Remember, spoof websites or phishing ads can open you up to fraud risk. Always check the destination URL of an advertisement or website, and be wary of clicking links in unsolicited messages. Better yet, if you are looking for information, go directly to a company’s official website. 
  • Always check to ensure the individual, firm or trading platform you plan to work with is registered with the Alberta Securities Commission before investing. Generally anyone offering investments should be registered with the ASC.

While unexpected investment opportunities can seem enticing, falling victim to fraud can have long-lasting financial and emotional impacts. Educating yourself about common scam tactics and staying vigilant is the best defence against losing your hard-earned money. 

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.