The internet can be a quick, easy, and cheap way for scammers to find potential victims for their investment scams. Often these scams play on peoples’ interest in short-term investment options, new business or investment opportunities, or ways to make money from home.
How Online Investment Scams and Promotions Work
The two examples below are focused on investing, but there are other scams on the internet and social media that go after bank accounts or personal information.
Online Searches and Websites
Be careful when searching for ways to make money online. Online investment scam websites can look as professional as legitimate financial services websites. What starts with a simple “easy ways to make money” search can lead to discovering a fraudulent investment.
Be wary of websites that openly ask you to invest online, whether it’s for their business or for another company.
Consult a registered investment advisor, lawyer, or accountant if you find an opportunity that appeals to you, because sometimes scams look like the real thing. Seeking a second opinion from a professional independent of the investment is always good practice.
Email scams often start as an unsolicited message in your inbox. The sender may even try to look like a company or person you know.
As with any investment communication, be wary of content that pressures you to act fast, put your money offshore, or invest funds with a “sure-thing” or “exclusive opportunity.”
You may also see testimonials from people talking about how much money they earn from home, how easy it is to make a lot of money quickly, or how much their life has changed since starting the investment. Be careful; if it is a scam, these testimonials could be fake or a symptom of a Ponzi scheme.
Investment emails scams may also be phishing scams. Phishing happens when someone tries to steal information using fraudulent emails. Clicking on links in a phishing e-mail can result in malware being put on your computer, which can result in identity theft or your computer being taken over by hackers.
Video: See How Online Investment Scams Target Investors
For more on how online investment scams target investors, watch this video:
How to Avoid an Online Scam
Just as you would in an offline setting, be cautious of people who approach you with a “hot tip” or news report about an investment or company.
- Never give out your personal information online, including your home address, phone number, full name, or banking information
- Don’t expect to get rich quick or make a lot of money fast
- Don’t fall for claims that say this information is only for certain people
- Install anti-spam software
- Don’t reply to emails from people you don’t know and never click links or download attachments in unsolicited emails
- Research opportunities and the person offering you the investment before making a decision
The Investment Fraud Warning Signs are another checklist to keep in mind when evaluating an opportunity.
Spot Investment Scams Checklist
BCSC InvestRight has a checklist to help investors avoid online investment promotion scams. This free resource shows how to protect yourself and your money from scammers. It also details ways that you could fall victim to online investment fraud.
How to Report a Scam
If you have come in contact with or invested in a potential scam, contact the BCSC.
The BCSC Inquiries team is available during regular business hours to answer investor questions or concerns over the phone or by email. You can reach Inquiries at 1-800-373-6393 or [email protected].
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.
InvestRight.org is the British Columbia Securities Commission’s investor education website.
I have been looking at these high yield investment programs and wondering who actually invests in them. Wikipedia says that these investment schemes are a “type of Ponzi scheme”. People tell me that setting up an account can be very complicated. Some HYIP funds insist on verifying bank wire transfers by demanding personal information (passport, driver’s license). I […]
While you may be inclined to use the professional services of someone recommended to you by a friend or relative, Canadian securities regulators encourage investors to always check registration before investing money with a financial advisor or firm.