Albertans are warned to watch out for online investment scams as too-good-to-be-true opportunities surface in the province.
Alison Trollope, director of communications and investor education for the Alberta Securities Commission (ASC), said the organization wants to bring awareness of scams to residents during Fraud Prevention Month in March.
“We have seen a rise in online scams related to crypto currencies, foreign exchange and commodities,” said Trollope.
Crypto currency includes the recently-popularized Bitcoin, but Trollope said investors need to watch out for things like volatility in the market and the fact that many crypto currencies aren’t regulated. While Bitcoin may be legitimate, others are not.
“It’s certainly a very risky option but what we’re talking about for Fraud Prevention Month is we’ve started to see crypto currencies being offered on Kijiji,” she said. “Those are very likely outright fraud.”
She said there are certain red flags to look out for when considering investments. Usually, if it sounds too good to be true then it is, she said.
“If there’s promising high rates of return with low risk, those two concepts don’t go together,” said Trollope.
In terms of foreign exchange investment, she said people should watch out for unregistered firms selling to non-accredited investors in Alberta. Foreign exchange trading is a global decentralized market for trading foreign currencies and sets the foreign exchange rate.
Trollope said there are often high rates of return promised with little to no risk, which should be an immediate red flag.
In addition, foreign exchange investment usually results in money being sent offshore, which she said makes it very difficult to retrieve. It’s important to know the firms being invested with are accredited and legitimate, she said.
“People have called us to let us know that they have tried to get their money back that is legitimately, they think, in their foreign exchange trading account, and they never hear from these people again,” said Trollope.
The commodity market is based on trends, she said. For instance, she said oil prices are beginning to go up a bit more, so scam artists will start offering opportunities with lines like, “Get in on the next big thing, oil is going to the moon, get in now.”
Pressure to invest immediately is another red flag to watch out for, she said. These deals should always be researched thoroughly to ensure their legitimacy.
Education is the best tool investors can have, she said. The ASC has launched a website, www.checkfirst.ca, which provides information, videos, Investing 101 sessions and other options to help people get acquainted with investment markets and scams.
“To us, we truly believe that knowledge is power,” said Trollope.
She said one of the biggest problems in fraud prevention is that often investment scams go unreported.
“We really encourage Albertans, if you think that you’ve come across a fraudulent investment – likely something like a stock or a bond or something like that – that you think doesn’t see quite right, we really urge people to contact us,” said Trollope. “Even if you might have lost a little bit of money or you didn’t lose any money at all and you’d just rather forget about it, you could be helping to protect other Albertans from falling into the same trap.”
