Canada — Fraud Prevention Month. Crypto-currencies under scrutiny: red flags alert.

March kicks off the annual fraud prevention campaign in Canada, also referred to as Fraud Prevention Month. In the light of some alarming statistics (in the province of Alberta alone, 44 % of investors lack investing confidence) the campaign aims at informing and protecting investors against scammers, by bringing common red flags to their attention.

When it comes to investing, having little to no knowledge about that which one invests in, and only following trends can create a false sense of urgency, which is how one becomes more vulnerable to scammers. While digital currencies are gaining popularity, we must not forget that in most cases by the time a trend has reached the general public, it is already too late and celebrity endorsements or social media propaganda mostly profit scammers.

We are dealing with methods of scamming which are becoming more and more intricate and adapt to market trends, like former binary options companies which merely changed their name to avoid legal pursuits after the ban. They now specialise in crypto-currencies.

In response to a growing number of fraud cases and to better protect more vulnerable targets like seniors, Fraud Prevention Month uses various means such as directing investors towards useful resources, events, talks and even fraud quizzes. Alison Trollope, director of communications and investor education at the Alberta Securities Commission (ASC) also pointed at as a website established by the ASC to find out whether a given company is registered with ASC or to report suspected cases or fraud and help with investment decisions.

For suspected cases of fraud outside of Canada, as a rule of thumb, caution is advised. A background check on the company is strongly advised prior to making any financial decision. The typical red flags to look out for are :

  • A false sense of urgency — feeling like you are being pressured to make a decision right away
  • Overly mediatized investment opportunities
  • Get-rich-quick methods
  • Promises of a big return on investment
  • Celebrity endorsements
  • Having no financial knowledge or not knowing anything about that which one wants to invest in

What one can and must do is talk to professionals and determine one’s risk tolerance prior to investing. ASC website offers educational videos with experts, educational investment fraud videos and victims testimonials to heighten awareness. Dialogue is the key to making the right decisions. Financial fraud can nevertheless happen to anyone and if you feel like you fell victim to a fraud like this, contact us today.