As fraudsters, scammers and con artists vary their targets and methods, financial authorities hope to protect the public from becoming a victim.
March is Fraud Prevention Month and the Alberta Securities Commission (ASC) has launched a campaign designed to teach people what to look for and how they can keep their money safe.
Alison Trollope, ASC director of communications and investor education, explained investment scammers are increasingly taking advantage of Albertans. This is especially clear with a reported 44 per cent not confident in making a decision on investing their money.
“Seniors are particularly vulnerable because people may know that they have accumulated wealth or a home over time. They are seen as an opportunity for unsuitable investments,” Trollope explained.
“Last year, it was the binary option and now we have seen some of those same websites have morphed into offering crypto-currency. Fraudsters will simply rip something from the headlines and use that to attract attention.”
Bitcoin is one example of a crypto-currency, also known as digital currency, and are not produced by a government. While some of these currencies are legitimate, Trollope stated there are many growing in popularity and the value can be quite volatile.
These currencies provide access to a vast range of investments, which make investors feel they are getting into something new or the next big thing on the market. Fraud artists exploit that and tempt investors through marketing on social media and various websites.
Two other scams making the rounds recently include foreign exchange currency trading and commodities trading. According to the ASC, there has been an increase in calls regarding both issues with scammers capitalizing on claims of a fool-proof trading system or the quintessential get-rich-quick promise.
“The promise of a high return at a low or no risk, the lack of registration of a company or individual, celebrity endorsements and high pressure tactics,” explained Trollope of some of the telltale signs.
“If an investment provides significantly more than a bank would give, that’s a red flag. If someone says you don’t want to miss this opportunity, that’s a red flag.”
With that, Trollope provided some knowledge people can use to keep themselves from becoming a victim.
“In Alberta, any individual or company offering securities (investments) must be registered with the ASC. If you are unsure, check our website where we have a list of those that are registered,” she said.
“As well, ask lots of questions and if you don’t understand something, step away and take the time to do some research. No scam artist wants to do that, so you will likely see a red flag as they pressure you ‘get in now’ or ‘don’t delay.’ A healthy dose of skepticism is a good thing.”
She also stated it’s critical the ASC know about fraud or the potential for it in order to put a stop to it.
“In order to protect Albertans, the sooner we know, the earlier we can take proactive measures. Often, it is a challenge if we find out after the money is spent or moved offshore,” she added.
To help in identifying fraud, report suspected scams or to help with an investment decision, the ASC has established a website at www.checkfirst.ca where people can look up registration and numerous other free investment tools.