New online scam combines romance and investment in 'really twisted scheme'
Fraudsters build trust, raise idea of investment and ask for relatively small amounts of money
The B.C. Securities Commission is warning that a new twist to an online dating scam is on the rise, intertwining romance and investments in a costly combination.
In the scam, a fictitious dating profile is created and the fraudster gradually woos the victim, building up trust, before coming up with an investment pitch and asking for money.
"It's a twist on the romance scam, which we've heard about before, but also a twist on the investment scam and sort of puts those two together to come up with a really twisted scheme," said Doug Muir, director of enforcement with the securities commission.
One of the key differences between this scam and previous similar ones, Muir said, is how suddenly the question of investment comes up and the relatively small amounts of money being requested — often to the sum of a few thousand dollars.
"That can be used to their advantage to catch the victim off guard because, if they are focusing on the romance side, then all of a sudden you drop in some sort of investment angle, they may not pay as much attention to it as they should," Muir told Stephen Quinn, host of CBC's The Early Edition.
Red flags
Like any investment, he said, it's important to do background research beforehand and evaluate it.
Red flags to watch for include an investment that seems too good to be true — high returns for little to no risk — and pressure to invest quickly.
Canadians lost a reported $19 million to romance scammers last year but that's estimated to be just five per cent of the true number because many people don't report their losses out of embarrassment.
"Fraud is under-reported in Canada. It's a difficult time for people coming forward," Muir said.
He emphasized the importance of reporting the crime, even if it's small amounts of money that are lost. BCSC has the ability to intervene to help people get money back during investigation.
"What I think is important for people to understand is they haven't lost their money because they've been foolish, they've lost their money because they've been a victim of a very sophisticated scheme," Muir said.
With files from The Early Edition.