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.

ASC highlights top investment risks for 2023

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The Alberta Securities Commission (ASC) has compiled a list of the top investment risks and potential scams to watch out for in 2023, based on investor complaints, ongoing investigations, and current enforcement trends.

1. Advice from fraudulent “finfluencers”

Many people look to social media for “how-to” information, and that includes when it comes to finding information about investing. There is an increasing trend of “finfluencers” on social media. These financial influencers use their large social media followings to discuss trends and share advice on topics related to finance and investing.

Some fraudsters act as finfluencers to purposefully promote deceitful investment information through schemes like:

  • Touting: promoting an investment without disclosing compensation
  • Scalping: promoting a stock to quickly drive up the price and then selling at the inflated price

Investors should exercise caution when considering investments promoted as a sure thing. And do thorough research on the company, offer and all parties involved before investing in anything promoted on social media.

Where can you go for information? Start with a Google search about the company and offer. Even if the offer isn’t fraudulent, it may not be right for you. It’s important to fully understand anything you’re investing in.

2. New (fake) friend alert

Any investor should be cautious of new friends offering investment opportunities, particularly related to cryptocurrency or forex trading. Fraudsters often use apps and social networking sites to build relationships and establish trust with strangers, before tailoring an investment scam to their needs and encouraging them to invest increasing amounts of money through professional-looking websites. Victims some times see early returns, but these are designed to create a false sense of credibility. Eventually, the victim can no longer access the website or withdraw their money and the fraudster gives excuses or stops communication altogether.

Always be cautious about sharing any personal information online or in person. Always take time to consider the source of the information and research the opportunity on your own or in consultation with a registered investment advisor.

3. Impersonating a regulatory agent

Investors should be aware of fraudsters impersonating regulatory agents. These fraudsters may pretend to be staff from the ASC or another regulatory agency, using the agency’s logo, name, picture, credentials and social media accounts. When impersonating a legitimate staff member they pressure investors into providing personal information or transferring money. It’s important to always verify the identity of the source and remember that the ASC will never request that an individual transfer money to the organization or to any staff member. To verify the legitimacy of a request, investors can check verified ASC social media accounts on our website and contact the ASC’s public inquiries office to confirm the legitimacy of any request they receive allegedly from the ASC.

4. Spoofed Websites

There is a growing trend of spoofed websites that imitate legitimate investment firms. Often these sites offer unrealistic rates of return. These sites can appear in internet searches alongside legitimate firms and often claim to be “registered with the CSA” or authorized to sell investments in Canada. To protect yourself, always check the registration of any advisor or organization. To learn how to spot the red flags of fake websites, visit the interactive SpotTheSpoof.ca website brought to you by the ASC.

5. Celebrity endorsements

Be cautious of celebrity endorsements for investment opportunities. While it’s common for legitimate businesses to use celebrities to endorse their products, fraudsters do as well. When you see a celebrity promoting an investment, it’s important to remember that they may be being paid to do so with little to no understanding of the investment they are promoting or their image might be being used without their knowledge or consent. Fraudsters will often mimic celebrity personas, adopt similar social media handles, create cloned websites, and manipulate quotes and images to make the endorsement appear genuine. Investors should be cautious of any investment opportunity that is promoted by a celebrity.

As the new year gets underway, it’s a good time to review your investing goals and brush up on your knowledge to protect yourself from scams. Always be vigilant for red flags of fraud and thoroughly research any investment before making a decision. If you suspect any suspicious investment offers, report them immediately to the ASC’s public inquiries office. To keep up to date throughout the year, consider signing up for the ASC’s Investor Newsletter.

Three steps to take before downloading a mobile investment app

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Investing today has never been more accessible. With the advent of electronic trading platforms in 1992, the proliferation of internet accessibility in the mid-to-late 90s and the growing adoption of mobile devices in the early 2000s, investors now have access to a variety of easy-to-use mobile investment apps.

While these technological advancements have made investing more accessible, investors need to remember to conduct thorough research on any investment app they plan to use. Specifically, investors should consider their fee expectations, service needs and most importantly, if the app is credible and registered. Below are three steps to assess if an investment app is legitimate and suitable for you.

 

1. Registration is essential, even for investment apps

Not all apps offered through the app marketplace on our mobile devices are credible and such apps can expose you to the risk of fraud. It is important to always to check the registration of any investment advisor, firm or platform to ensure they are working in compliance with regulatory requirements. Securities professionals and firms dealing in securities are required to register with securities regulators, and this requirement extends to the investment apps they offer. Checking registration enables investors to validate that the investment app they plan to use is qualified and permitted to sell securities. Ignoring or skipping this step and using an investment app offered by an unregistered firm may not provide you with any of the typical investor protections that may exist with a registered one.

For those interested in investing in crypto-assets, check the registration of any crypto investment app that will hold custody of your funds or crypto-assets. Not all crypto-assets are deemed securities, but if an investment app holds your financial assets, it’s strongly recommended you only use one that is registered. To verify the registration of an investment app, visit CheckFirst.ca/check-registration brought to you by the Alberta Securities Commission.

 

2. Avoid the telltale signs of fraudulent or suspicious investment apps

Unfortunately, the ease and widespread appeal of mobile banking and investment apps is not lost on fraudsters looking to capitalize on eager investors. Fraudsters often create investment apps that imitate legitimate financial institutions and registered investment firms and promote them through online advertising or one-on-one interactions with targets. You can visit the CheckFirst Spotthespoof.ca website to learn more about these imitation websites and platforms.  Fraudsters also leverage the considerable market interest in crypto-assets to position their fraudulent investment apps as an easy way to invest in digital coins and crypto projects.

Remember these tips to avoid fraudulent investment apps:

  • Avoid unsolicited offers to download an investment app from those you meet online, like self-promoted experts, new acquaintances or love interests.
  • Check that the investment app you plan to download and use is the correct one offered by a registered financial institution or firm.
  • Be wary of investment apps with limited or broken functionality, spelling mistakes and odd in-app requests like wire transfers.
  • Conduct research online to see what others say about the investment app and if any red flags of fraud are found. Visit Checkfirst.ca/red-flags to learn what to look for.

 

3. Understand if the investment app is right for you.

Once you have conducted these steps, it’s important to review the fees and charges of your chosen investment app. Investment apps and platforms offered by financial institutions and firms do not have the same costs or services. Often the fees associated with trading, currency conversions and account maintenance will vary between them. Review the fee structures and the services offered and choose one that best fits your investing style, needs and expectations.

Investment apps have ushered in a new era of convenience for investors but you should still take your time to review which option is the best for you. Before you hit the download button, remember these steps to help you find a suitable and registered app for you.