To mark Fraud Prevention Month, the British Columbia Securities Commission (BCSC) surveyed more than 800 British Columbians to measure how susceptible they were to the “trust trap” – a questionable investment tip from friends or family.
Results suggest nearly half of young adults in BC would consider putting money into a dubious investment offer if it came from a friend or family member.
Fraudulent investment offers that exploit family, friendship and social connections are known as “affinity fraud.”
Respondents were asked how they would react to an investment opportunity that guarantees a monthly return of 10 per cent to 15 per cent and has no risk. For half of the respondents, the offer came from a friend or family member. For the other half, the offer came from “someone at a social event.”
Overall, people were more willing to consider an offer if it came from a friend or family member: 29 percent said it was “worth looking into,” compared with 20 per cent if the offer came from someone at a social event.
Surveyed Millennials Most Vulnerable to an Investment Tip from Friends or Family
The most vulnerability was found among 18- to 34-year-olds. 47 per cent of this age group would consider such an offer from a friend or relative.
People 55 years old or older were the most skeptical in such situations, with only 12 per cent being willing to consider such an investment offer from a friend or relative.
Become More Fraud Aware
To help crack down on this type of white collar crime, the BCSC is running a multi-media “Don’t Be Part of a Fraud” campaign, highlighting the importance of not falling into the trust trap.
The campaign features a new scenario-based quiz available on InvestRight’s Fraud Guide to test their ability to spot suspicious investment opportunities.
You can also learn more about affinity fraud by reading about the affinity fraud warning signs.
About the Survey
This online survey was conducted for the BCSC by Innovative Research Group among a representative sample of British Columbians from February 6th to February 10th, 2020 as part of an omnibus survey. A total of 801 British Columbians aged 18 and over completed the survey. The results are weighted to a representative sample of 800 by age and gender within each region of the province using the latest available Census data to reflect the actual demographic composition of the population.
Report a Concern
If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Inquiries at 604-899-6854 or 1-800-373-6393 or through e-mail at [email protected]. You can also file a complaint or submit a tip anonymously using the BCSC’s online complaint form.
The initiative aims to drive awareness about investing online, digital investment fraud and help investors make better-informed investment decisions.
To mark Fraud Prevention Month, the BCSC is encouraging investors to slow down and think before investing to avoid becoming the victim of a social media-based fraud.