(NC) The internet is wide open space that provides access to unlimited information and opportunity. But with all its advantages, it’s easy to forget that this same technology is just as accessible to scam artists who exploit the anonymity of the internet to swindle victims.
A term typically used in the online dating world, “catfishing” is the act of creating a false online identity for deceptive purposes. The word also translates well to online investment fraud. While scam artists may not be lying about their personal profile, they will lie about their company’s location, legitimacy and expertise to gain your trust and your investment.
There are many ways scam artists use online tools to entice investors with fraudulent investment opportunities, including sending spam emails, engaging in online discussion boards or chat rooms, using social networking websites, and designing deceptive online advertising.
Binary options scams are a type of online investment fraud that have increased in popularity over the past two years. Unfortunately, it’s one that many Alberta investors are falling victim to.
Binary options are essentially “bets” on whether an asset’s value will increase or decrease over a short fixed period of time, similar to gambling. Company representatives will begin by asking for a small initial investment, promising unbelievable returns, which you will initially see in your account. What many investors don’t realize is that these gains are simulated gains, and the profits don’t actually exist. The scam is generally uncovered when investors experience difficulty withdrawing their money or have trouble getting in touch with the company.
Based on information compiled by the Alberta Securities Commission (ASC), Albertans who fall victim to binary options scams lose, on average, more than $20,000. This number becomes even more alarming when you find out there are actually no registered binary options firms in Canada.
The Joint Serious Offences Team is an enforcement partnership between the ASC, RCMP and Alberta Crown Prosecution Service created to investigate and prosecute serious securities violations using the Securities Act (Alberta) and the Criminal Code.
Here’s their list of key warning signs of online investment fraud to watch out for:
1. Sending money overseas. When investors send their money overseas and something goes wrong, it can be difficult or impossible to get the money back, and unfortunately regulators and agencies in Alberta can do little to help.
2. Guaranteed high returns and no risk. In the realm of investments, there are no guarantees. Typically, investments that have the potential to generate larger returns come with greater risks.
3. Unregistered investment firm or advisor. With limited exceptions, in order to legally sell securities in Alberta, an individual or company must be registered with the Alberta Securities Commission. Whenever you’re online, you can run a quick and free registration check by going to www.aretheyregistered.ca.
For more information visit www.CheckFirst.ca.