It’s harder than ever to detect investment scams — here’s how to avoid falling victim

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This article was published 03/04/2025 (554 days ago), so information in it may no longer be current.

MONTREAL – Melanie McGovern was scrolling through her Instagram feed in February 2024 when she saw her 16-year-old niece had sent her a message.

“I accepted it. And then the account reached out and asked me for money.”

McGovern knew her niece as a responsible teenager, and they rarely corresponded via that social media platform. She was skeptical.

“So I texted my sister-in-law and said, you know (her) Instagram has been hacked?”

For McGovern, a spokeswoman at the Better Business Bureau, the experience offered a first-hand look at a would-be crime she sees more and more often online, where fraud schemes are flourishing.

Investment scams have evolved by leaps and bounds from the blatant ploys and spam pitches of decades past, morphing into phoney cryptocurrency websites, false bank correspondence and impersonations of loved ones, including phone calls that draw on voice-cloning technology.

Abetted by artificial intelligence and crypto hype, investment fraud marks a rising threat to Canadians’ financial security and demands a range of protection measures.

Investment scams — where someone tries to convince you to invest funds based on false information — remained the riskiest scam type in 2024, according to a March report from the Better Business Bureau. Four out of five people targeted said they lost money.

Preying on loneliness and distrust of institutions, the category also had the second-highest median dollar loss at $5,000 per person (romance scams, while less common, took the biggest bite per capita at $6,100).

Some $310 million was reported lost to investment fraud in 2024 compared to $33.5 million in 2020, according to the Canadian Anti-Fraud Centre. However, that figure represents only a fraction of the true tally, as the centre estimates 90 to 95 per cent of incidents go unreported.

Here’s how to avoid falling victim:

Press pause

If someone reaches out through a messaging platform such as Facebook, WhatsApp, TikTok or via regular text with an urgent call to pour your money into a hot new stock or cryptocurrency, take a breath — even if you know them personally.

“Fraudsters are always trying to create a sense of urgency and they’re trying to elicit an emotional response from you because that creates this vulnerability or this weakness that they can take advantage of,” said Geoff Morton, senior director of digital fraud strategy at the Royal Bank of Canada.

“Think twice.”

Banks will never threaten to close your account if you don’t act fast, or use email or text to ask for sensitive information such as passwords, login credentials or a one-time passcode, according to RBC.

“Remember to take a step back,” said Anthony Ostler, CEO of the Canadian Bankers Association. “One should never be in a rush.”

Phone a friend

Call a pal, loved one, co-worker, or the bank or financial firm purportedly on the other end of the line.

“If they reach out to you and they say there’s a problem with your account, it’s OK to hang up and call back even if you’re hanging up on the legitimate institution,” Morton said. “But call the number on the back of your card” — not the number that just rang you.

A call to a trusted person in your life can offer perspective if you’re unsure. Or, if a contact is apparently asking for money, reach out to them through a different channel.

AI can allow scammers to impersonate a relative’s voice through deepfake technology, making a call-back to confirm their identity all the more crucial.

Meanwhile, removing contacts whose accounts have gone dormant — making them ripe for hacking — from social media friends lists marks one way to block off potential digital predators.

Beware the crypto keeper

Cryptocurrency scams are mushrooming in the online fraud ecosystem, amounting to nearly half of investment scams reported to the Better Business Bureau last year.

Ignorance of crypto trading and wariness of traditional banks can both be exploited by fraudsters. One common tactic is spoof websites and faux cryptocurrency dashboards that showcase your astounding “gains” after buying digital currency from a legitimate exchange and transferring it to a crytpo address controlled by the fraudster.

“People will get emails from the scammer with a fake return, like a spreadsheet showing that their money is growing, or a graph saying you earned this much in so many weeks,” said McGovern. “They’re not realizing that’s all fabricated.”

Raise your tech defences

On your banking or financial apps, enable multi-factor authentication and alerts for when transactions occur.

Use biometric features such as face or fingerprint identification to log in. Also set up auto-deposits for Interac e-transfers, so you’ll know that any text with a link to deposit one is phoney.

Finally, never allow third-party access to your computer. “That is a big no-no,” said Ostler.

Share your story

If you’re an investment scam survivor, don’t be afraid to come forward to authorities and those close to you.

“Scams are often something that we are very embarrassed about or don’t really want to talk to people about. We also need to break down that stigma because we’re up against a very sophisticated enemy here,” Morton said.

Elaborate criminal networks — many of them operating so-called scam farms from large compounds in Southeast Asia, according to the UN Office on Drugs and Crime — bilk billions from victims across the globe each year.

Those contacted by a possible scammer or out money because of one can report the incident to local police and the Canadian Anti-Fraud Centre.

Recipients of a message proffering a possible scam can forward the text to 7726 to alert their cellular provider to open an investigation.

This report by The Canadian Press was first published April 3, 2025.