Investment scams have been on the rise in Canada over the past few years, with reported losses increasing by nearly 20 times between 2019 and 2023. According to data from the Canadian Anti-Fraud Centre (CAFC), fraudulent crypto investment platforms account for more than 50% of investment fraud reports and money lost.
In 2019, the CAFC received 489 reports of investment fraud from 388 Canadian victims, totaling over $15.7 million. By 2023, these numbers had skyrocketed to 4,010 reports from 3,631 victims, resulting in a staggering $309.3 million in losses.
“Unfortunately, investment scams have been a major contributor to the sharp increase in reported money loss to the CAFC in recent years,” said Jeff Horncastle, a spokesperson for the CAFC, in an email to CTV News.
The trend is mirrored in Ontario, where the CAFC received 145 reports from 124 victims in 2019, resulting in losses of over $4.5 million. In 2023, these numbers had ballooned to 1,341 reports and nearly $111.3 million in losses.
“These are alarming numbers,” said Det. Shaun Wahbeh of the Ottawa Police Services (OPS) Organized Fraud Section. He added that the average reported losses range from $50,000 to $4 million, with an average of one or two cases of investment fraud being reported in Ottawa every day.
However, these numbers may only be a fraction of the actual losses, as many victims do not report the fraud due to embarrassment or shame.
One couple, Victoria and Doug Lloyd, recently fell victim to a cryptocurrency scam and lost over $177,000 through a line of credit. “It’s just not fair that we worked for all of our lives and now all of our money is going to pay the interest on this line of credit that somebody else took,” said Victoria.
Investment fraud cases, especially those involving cryptocurrency, can be challenging to investigate and prosecute. “As law enforcement, we’re able to trace it if it’s within a short window because it’s virtual money, so it jumps from wallet to wallet,” explained Wahbeh. He also noted that the money often ends up overseas in countries like Russia and Nigeria, where it can be challenging to retrieve.
The CAFC and OPS warn that fraudsters use various methods of solicitation, including search engine optimization, compromised social media accounts, online ads, emails, and direct phone calls from fraudulent crypto investment companies.
To protect yourself from investment scams, the CAFC recommends conducting thorough research before investing, verifying the legitimacy of investment companies, and being cautious when sending cryptocurrency, as transactions are irreversible. They also advise being wary of individuals who try to convince you to invest through dating sites or social media and questioning the legitimacy of investment offers.
In addition, the CAFC provides a list of warning signs and tips to avoid falling victim to investment fraud, such as verifying the credentials of investment companies and not feeling pressured or rushed into making investment decisions. They also recommend reaching out to trusted friends through alternative means of communication if you receive a suspicious investment offer from them.