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Spot a Fraudster

Understanding and recognizing the things scam artists do to promote their schemes will go a long way in helping you to protect yourself.

There are people who put themselves forward as legitimate investment advisors, but their real goal is to steal your money. Fraudsters will also try to take your money by selling you a fictitious investment product or strategy. Knowing how to identify these people will help you avoid falling for their scams.

What Does a Fraudster Look Like?

Fraudsters look like you and me. They often look professional and successful and have impressive offices and addresses, so you will think they are legitimate professionals. They are intelligent. They know how to be extremely sociable and charming. If you catch them in a lie, they will make up another lie so quickly that you will seldom, if ever, notice.

How Does a Fraudster do Business?

For a scam to work, fraudsters need to gain your trust and confidence. They will instill in you a sense of security, and make you feel dependent on them for financial guidance. This will keep you interested in investing more money and may even get you to recruit your friends and family.

After you invest, the contact with the fraudster will dwindle, and may stop altogether. They will use your financial dependency on them as a threat to stop you from taking any action.

Scam artists use pressure tactics, and act like an expert with special information. They may be a part of or try and gain access to a group or community that you belong to.

What Happens to Your Money?

Sometimes money acquired by the fraudster is quickly transferred to an offshore account. In other instances, it is simply withdrawn, put in their pockets, and spent on personal items like houses, vacation homes, expensive trips, cars, boats, etc. By the time a person finds out an investment is a scam, the money and the scam artist are usually gone.

How Can You Stop a Fraudster?

Even though someone is offering you a great investment and it sounds like you will be missing out if you do not invest, it is always okay to say no and walk away. This may not be the right investment for you, even if it is legitimate. Knowing the five key Fraud Warning Signs will put you in a better position to recognize and reject fraudulent investments.

Do not take everything you hear or read at face value. Ask questions if you do not understand, and do your own due diligence about an investment. If you need help in evaluating the investment, seek independent advice from a registered investment advisor.

Remember to check the registration of any person or business trying to give you investment advice. Generally, people offering you an investment opportunity or giving advice must be registered with their provincial securities regulator. Visit our Advisor Check section for more information and conduct a check.

Do not let the fraudster get you twice. Some people go along with another scheme in which the fraudster promises to make good on the original money lost and generate new returns. Though it is understandable you would want to make up for the money lost, the usual result is that you lose even more.

Make sure that you report investment fraud or any suspicious activity to the BC Securities Commission. You can report by reaching out to the BCSC Contact Centre or by using the BCSC’s online complaint form. Remember to keep records in case you need to make a complaint or take legal action.

Crypto Quiz

Test Your Crypto Asset Knowledge.

This quiz is designed to introduce you to the basics of crypto assets. It is not intended to provide investment or financial advice, and should not be relied upon as a substitute for such advice.

Cryptocurrencies and blockchain are the same thing.