Sask. Government warns of increase in cryptocurrency investment scams
CBC News | Posted: April 3, 2021 6:26 PM | Last Updated: April 3, 2021
The province is warning of fraudsters using flashy ads and promises of high returns to scam people
The Government of Saskatchewan is warning of an increase in fraudulent investment opportunities involving cryptocurrency.
In a release, the province said the Financial and Consumer Affairs Authority (FCAA) is warning of flashy advertising with promises of high returns to target people looking to grow their income for retirement.
The province said the fraudsters are creating fake websites, and use ads, fake recommendations and private messages to convince people to part with their money and achieve big returns.
A few common methods are:
- Online ads which highlight high returns and low risk.
- Pop-up ads that promote cryptocurrency giveaways or include fake customer reviews.
- Recommendations on social media that seem to come from a friend.
- Private messages on social media from fake profiles that look legitimate, such as pretending to be senior executives and their profiles showcase fake investor references.
The province said cryptocurrency is very complicated, so investors may find themselves in a situation where they are unsure about the investment opportunity.
It said there are a few warning signs:
- Promises of high returns: Fraudsters use the promise of higher-than normal investment returns to lure investors. If it sounds too good to be true, it is.
- Guaranteed risk-free: Fraudsters will lure you in with the promise of a zero risk investment. All investments involve some degree of risk.
- Pressure to buy: Fraudsters use high-pressure sales tactics and may tell you there's no time to ask for advice.
- Complex documents and technical jargon: Fraudsters want to confuse you with complex documents and technical language. They may dismiss your questions and use arguments that are inconsistent and filled with jargon.
Tips to protect yourself
The province said there are ways people can protect themselves from fraudulent investments:
It said people should do their research, examine the website thoroughly and watch for statements that are too good to be true. People should also search the company's reputation online to see reviews from other sources as well.
People can also check to see if the person or company is registered, and check the details with the Canadians Securities Administrators National Registration search.
People can also use the Canadian Securities Administrators Cease Trade Orders database to check if the company has broken regulatory rules in the past.
Be suspicious of high returns and anyone promising an investment will perform a certain way, the province said.
Lastly, the province said people should not feel pressured to make quick decisions or get a second opinion through seeking professional advice before investing or buying a service.
Anyone who discovers a fraudulent investment opportunity, people are encouraged to report the scam to the FCAA Securities Division at enforcementfcaasd@gov.sk.ca or 306-787-5936.