By Liam Verster

#TakeSomeTime

Alberta Securities Commission encourages Albertans not to rush into potential scam investments

Mar 1, 2021 | 2:04 PM

As part of Fraud Prevention Month, the Alberta Securities Commission (ASC) has launched the #TakeSomeTime campaign to encourage people not to rush into investment opportunities without researching them first, as fraudsters have been using the motivation of earning quick money to scam people.

Hilary McMeekin, the Director of Communications and Investor Education with ASC, says there are two main types of scams used online, ‘now or never’ and ‘affinity fraud.’

The ‘now or never’ technique uses language that creates an emotional reaction and instills a sense of urgency that someone will miss out on a great opportunity if they don’t get involved right away.

“Quite often these investment opportunities come at us with quite a bit of pressure, ‘get in now,’ ‘this is your chance,’ ‘don’t miss this opportunity,’ so you feel that sense of pressure,” says McMeekin.

“Sometimes it even comes through our friends or family, because they, in most cases unknowingly, are involved in a scam or a potential scam, and they’re quite excited about it so they’re coming at you too.”

Having friends or family become involved in potential scams typically comes through the ‘affinity fraud’ technique, in which scammers use social media to build trust with people, and then use those people as a mouthpiece to spread the word of their ‘investment opportunity.’

“Often times because it comes from our friends or our family, we trust it. And this is not to suggest we shouldn’t trust our friends and family, but we should always, always stop and do the research ourselves.’

ASC is encouraging Albertans to take their time and not rush into investment opportunities, whether they are legitimate or not, and have launched an online tool to help buy some time.

The Excuse Bot program can be used to generate humorous responses to people pressuring someone into investing, as well as provide links to relevant, unbiased information from checkfirst.ca.

ASC will also be running #TakeSomeTime ads on social media platforms to try to connect with people on the same platforms scammers are using.

Along with the two main fraud techniques, McMeekin also warns of online advertisements encouraging people to get involved in day trading or Forex (Foreign Exchange Market) trading with the promise that it’s easy and will yield financial rewards.

“I would say that in itself is a red flag that we should all pay attention to. I know we’re all looking for the next opportunity to make money, but when you see that we know that day trading, Forex and those kinds of things really are complicated and it does require training, and it also requires registration. So don’t trust the advertising that says ‘Hey, it’s super easy, get into it today just by calling us today and paying us a fee.'”

McMeekin adds while investing can be a great opportunity for some and add to someone’s financial portfolio, it’s always important to check the validity of any investment opportunity and weigh the risks versus the rewards, because there’s always risk associated with investing.

She also says a lot of people are considering investments after what happened with GameStop, but adds that it’s not always safe to take financial advise from strangers online, and that people should do their research and even consult with a professional at a bank or financial institution before investing their money.

Data from the 2020 Canadian Securities Administrators Investor Index Report shows fraud incidents are rising among those under the age of 35, with 23 per cent of 18-30 year olds reporting that they have been approached by potential scams. Also, 45 per cent of Albertans between the ages of 18-30 have reported seeing investment opportunities advertised on social media.

McMeekin encourages anyone who comes across these types of scams to report them to the Alberta Security Commission, through either 1-877-355-4488 or inquiries@asc.ca, as those reports can be used to come up with plans to combat and prevent fraud attempts in the future.