Quick easy money? Sometimes it’s a quick easy LIE
March 1, 2023 – GATINEAU, QC – Competition Bureau
Are you looking to invest? Thinking about cashing in on the crypto craze? Think twice. It’s possible that the promise of a way to make quick, easy money is just an easy way to separate you from your money.
Canadians are being scammed out of record-breaking dollar amounts via cryptocurrency investment fraud. According to the Canadian Anti-Fraud Centre, Canadians reported losses of $308.6M to investment fraud in 2022 compared to $164M in 2021. Of those reports, many involved Canadians investing in cryptocurrency after seeing a deceptive ad.
Investment fraud, including cryptocurrency fraud, takes many forms, but they all have one thing in common – the big lie that you can make tons of fast cash!
Crypto scammers use various tools to entrap you. They create a false sense of urgency and capitalize on your fear of missing out on the next big thing. They use fake websites that feature phony reviews and endorsements from celebrities and regulators, even fake videos, all to make the investment look legitimate.
They reach you through the usual channels, like deceptive ads on social media, apps and websites, or through phone calls, emails and text messages. And they make the same false promise – a huge return on investment!
What makes crypto scams unusual is the complexity of digital finance and currency. Many Canadians don’t fully understand cryptocurrency beyond knowing that it’s a newer form of payment. Scammers know that, and they use that lack of knowledge to deceive people. Cryptocurrency is a hot topic, and many want in on the “action”. No one is immune and anyone, including businesses, can be a victim.
So next time you get an offer urging you to “invest now before it’s too late!” follow our tips to avoid becoming a victim of crypto fraudsters.
Tips to avoid crypto investment fraud:
- Don’t act quickly: Take 5 and think about the offer — 5 minutes, 5 hours, 5 days. Fraudsters often use high-pressure tactics to get consumers to hand their money over quickly, before they have time to think.
- Be wary of “too-good-to-be-true” investment offers from friends, family, social media or dating website users, including new love interests.
- Be skeptical when someone insists that you don’t discuss the investment opportunity with others.
- Be aware that once a cryptocurrency transaction is completed they cannot be reversed.
- Don’t fall for claims that cryptocurrency investments are backed by the Bank of Canada or other regulators, or that cryptocurrency is legal tender. This isn’t true.
- Verify if the investment companies are on the Canadian Securities Administrators’ National Registration Search Tool.
- Check to see if a person or company has been flagged as a risk to investors on the Investment Industry Regulatory Organization of Canada website and with your provincial and territorial regulators. Every province and territory has one or more bodies to regulate financial institutions under their responsibility.
If you believe you have been misled or think you’ve seen a cryptocurrency investment fraud, report it to the Competition Bureau.
You can also report it to the Canadian Anti-Fraud Centre, the Better Business Bureau or your provincial or territorial regulator.
- Canadian Anti-Fraud Centre: Investment -- Fraud Alert
- Royal Canadian Mounted Police: Countering the rise of cryptocurrency fraud
- Canadian Securities Administrators: Common Frauds and Scams – Crypto scams
- Financial Consumer Agency of Canada: Tips to avoid investment scams
- Better Business Bureau: 2021 BBB Scam Tracker Risk Report – Cryptocurrency scams signal new marketplace risks
- Canada Revenue Agency – Investing in Cryptocurrency
- Royal Canadian Mounted Police – Cyber safety
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The Competition Bureau is an independent law enforcement agency that protects and promotes competition for the benefit of Canadian consumers and businesses. Competition drives lower prices and innovation while fueling economic growth.
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