Albertans are being warned to be even more cautious now regarding schemes surrounding investment fraud. Image: ASC

Public warned of increase in investment scams

ASC urges caution amidst uptick in COVID-19 related scams

If it sounds far too good to be true, it almost always is.

That’s the advice from the Alberta Securities Commission (ASC) as investment scams ramp up across the country and try to take advantage of the current COVID-19 pandemic.

One such scam is trying to lure in possible investment in companies claiming to have developed products or services that prevent, detect or cure the coronavirus.

It’s called a pump-and-dump scheme, so here is what you need to know: they spread positive but false information to get people to buy stock with hopes the ‘hype’ spreads; the fraudulent penny stock companies have limited or untrue information that is publicly available; they quickly dump the stock before it drops giving them a windfall while the rest lose their investments.

Another scam uses fear to try and steal people’s money. Anyone contacted regarding their investments should not give out any personal information then call their advisor or bank to verify the call was legitimate.

To date, no product or service is authorized to treat or protect against the virus. For reliable information, the public should search information on the Canadian or Alberta government websites.

Survey says

Meanwhile, as recent survey from the ASC shows a significant number of Albertans are confident they could pick out an investment fraud.

A total of 75 per cent of respondents expressed confidence they have the knowledge and awareness to protect themselves.

However, when it came to actually spotting the signs of investment fraud, more than 70 per cent overlooked the red flags of celebrity endorsements and tax-free investing. Meanwhile, over half of respondents failed to identify the warning signs of high return, low risk claims and the exclusive or time-sensitive opportunity assertion.

Another statistic showed 58 per cent trusted friends and family on an investment, which the ASC explained is important as one in five people approached with an investment scam said they were introduced to it through a personal connection.

“Just because an investment opportunity comes through someone we know and trust, doesn’t automatically mean it’s not fraudulent,” said Hilary McMeekin, ASC manager of communications in a release.

“Regardless of how much you trust the source, it’s critical to take steps to protect your hard-earned money, like checking registration.”

The ASC recommends people visit www.CheckFirst.ca for information and resources to guard against investment fraud.

People should also be familiar with these typical red flags:

  • Promises of high returns with little or no risk. There is no such thing. Usually, the higher the potential returns, the higher the level of risk.
  • Lack of registration. Generally, anyone offering an investment in Alberta must be registered with the ASC. A free and quick national registration search is available via Checkfirst.ca.
  • Pressure to invest immediately. If someone is pressuring you and you are uncomfortable, decline the offer or seek advice from an independent financial professional before deciding to invest.
  • Offshore investment or profits that claim to be tax-free. Taxes can sometimes be deferred, but they can’t be avoided. This tactic is used to get investors to send their money offshore where it is difficult, if not impossible, to get back.

“We often hear from victims that they never thought fraud could happen to them — but anyone can be impacted,” said McMeekin.

“Protecting one’s self against fraud ultimately comes down to understanding the red flags and doing research before signing on the dotted line. Fraud is constantly evolving and changing, so it’s important to stay-up-to-date with information and remain vigilant.”

CoronavirusScams

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta predicting 400 to 6,600 deaths from COVID-19 in months to come

Alberta predicting 400 to 6,600 deaths from COVID-19 in months to come

Alberta RCMP have reported being threatened with COVID-19

Some members of the public are threatening RCMP by claiming to have COVID-19 and coughing on them.

25 new cases Tuesday in Alberta, provincial total at 1,373

Premier Jason Kenney to provide more information later in the evening

Rimbey pet store is delivering to keep furry friends fed

Ma & Paw’s Pet Supplies is doing curbside pickup and doorstep delivery for pet owners.

Ponoka RCMP arrest male from Rimbey

Ponoka RCMP briefs from March 30 to April 6

COVID-19 world update: Joy in Wuhan as lockdown lifted; Pope denounces profiteers

Comprehensive update of coronavirus news items from around the world

Liberals asked to help cover overruns on projects delayed by COVID-19

$5 billion in federal funding for 607 projects

COVID-19 sparks rise in online child predators, says UNICEF chief

Canada’s efforts to help young girls and women recognized

More help on way for those not eligible for emergency aid programs

A retooled Canada Summer Jobs program to be announced

Celebrated singer-songwriter John Prine has died at 73

Celebrated singer-songwriter John Prine has died at 73

Dr. Donald: why the U.S. president keeps touting an unproven COVID-19 treatment

Dr. Donald: why the U.S. president keeps touting an unproven COVID-19 treatment

Group of First Nations want Supreme Court to hear appeal on Trans Mountain

Group of First Nations want Supreme Court to hear appeal on Trans Mountain

Most Read