As economic pressures persist, there has been a notable rise in predator frauds throughout 2023, which is expected to continue into 2024. Predator frauds include employment scams and investment frauds, which take advantage of individuals in difficult financial circumstances seeking opportunities to alleviate their financial burdens. Or, it is simply a matter of human nature – greed.
Investment fraud is the most common consumer financially devastating form of deception. According to the Canadian Anti-Fraud Centre (CAFC), investment fraud losses exceeded $309 million in 2023. This represents an 88% increase from 2021. Last year, CPA Canada reported that the majority of investment fraud activities are associated with cryptocurrency investment platforms. Investors are enticed to make small investments, which supposedly quickly earn high returns. Yet, they are discouraged from making withdrawals.
When they demand the return of their funds, they face the sad reality that the investment platform is fraudulent, and their money is gone.
To mitigate the risk of falling victim to investment fraud, businesses and individuals can adopt precautionary measures:
- Conduct thorough research – Perform online research on the digital asset, the investment company, and the advisor before investing in cryptocurrencies or with foreign trading platforms. Search for credible reviews and investigate complaints.
- Confirm whether the investment platform and advisor are appropriately regulated and registered with the relevant regulators. For example, are they listed on the Canadian Securities Administrators’ ‘Are they registered?’ roster? Have they been subject to any disciplinary action?
- Maintain realistic expectations – Understand that no investment can be guaranteed to provide significant profits. If it’s too good to be true, it probably is.
According to CNBC, fake employment schemes rank among the top 5 financial frauds to be wary of in 2024, particularly given the rise in company layoffs. These schemes typically involve sophisticated tactics designed to deceive victims, enticing them with seemingly legitimate job opportunities. Fake employers often initiate contact through interview requests, followed by demands for personal information (supposedly for background checks).
Once armed with personal identity details, predators can take over bank accounts or apply for new credit cards or loans. Some job frauds promise easy access to supposed high-income opportunities but require an upfront ‘application fee.’
To combat employment scams, consider the following steps:
- Conduct online background research, looking for reviews of the purported employer from credible sources. Search for the company or individual offering the job alongside keywords such as ‘scam,’ ‘review,’ or ‘complaint.’ See whether others have reported instances of being defrauded by the same entity.
- Avoid clicking hyperlinks embedded in unsolicited texts, emails, or social media messages, regardless of any apparent association with a known company.
- Exercise caution against any requests for upfront payment to secure a job. Be wary of schemes requiring payment or advances (particularly cryptocurrency transfers) as prerequisites for employment.