Photo courtesy CBC.
At least one sign of investment fraud is missed by most British Columbians, according to a release from the BC Securities Commission (BCSC).
The commission says 44 per cent correctly identified all warning signs when presented six scenarios associated with investment fraud.
Those situations include:
- Guaranteed high returns with little or no risk
- Moving money outside the country to avoid tax
- A strong push to act now
- An offer of inside information
- An offer available only to a select few
- Being encouraged to invest because friends and family have already done so
Although 65 per cent correctly spotted at least four of the six warning signs, the BCSC Director of Communications and Education Pamela McDonald says one missed sign is sometimes all it takes to be victimized.
The least recognized sign was a recommendation to invest from friends or family, while the most identified warning sign was a guaranteed high return with little or no risk.
The BCSC says twelve per cent of British Columbians have admitted to losing money in fraudulent investments, with men more than twice as likely as women to be victimized.
Among investment fraud victims, 47 per cent said they lost more than $5,000.
Identifying all six of the warning signs was more common among older British Columbians, with 65 per cent of those 55-years-old or over able to catch those scenarios, to just 20 per cent of those between 18-and-34-years-old.
When asked if “Reporting a fraudulent investment is more trouble than it’s worth,” 59 per cent disagreed compared to 16 per cent that felt that way.
“We are encouraged to see that most people are willing to report investment fraud, rather than just letting it go,” BCSC Director of Enforcement Doug Muir said in a statement.
“Our investigators need the public’s help. The sooner we know about scams, the better our chances of preventing further losses.”
The BCSC also said 68 per cent of B.C. residents who are “do-it-yourself” investors or use “robo-advisors” were aware of all six warning signs, significantly more than investors who work with banks or financial advisors, or who invest in something other than securities.
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