For many in today’s increasingly connected online world, using apps and social platforms to connect with others has become convenient and common. As of 2021, eHarmony, a popular online dating platform, reported that 36% of Canadians use online dating platforms. Unfortunately, with the popularity of dating apps and social media, fraudsters are increasingly using them to scam Canadians.
According to data from the Canadian Anti-Fraud Centre, romance and investment scams were among the country’s top forms of fraud. Last year alone, Albertans lost $4.5 million dollars to romance-related scams. Fortunately, there are steps you can take to safeguard your personal information and recognize, avoid and report these types of scams.
What are online investment and romance scams?
One of the go-to tactics of fraudsters is to tailor their scams to potential victims. Social media platforms can offer a wealth of valuable information - public profiles or posts can share insights into your location, interests, friends, and family members, all of which can help the fraudster craft a convincing and tangible story around their scam.
Fraudsters can even impersonate someone the victim trusts, such as a friend or family member, to offer investment opportunities. In a 2020 Investor Index conducted by the Canadian Securities Administrators, 1 in 4 Canadians stated that they were more likely to trust an investment opportunity if it was recommended by someone they knew.
In addition to social media, scammers patrol online groups and dating sites, seeking to establish trusting friendships or romantic relationships with potential victims to manipulate them into investing in a scam. They may pressure individuals to invest, guarantee high returns with little risk, and even convince the victim to continue investing over time, leading to substantial losses.
Protecting your social media profiles from investment fraud and romance scams
There are steps you can take today to protect yourself from investment and romance scams on social media and dating apps.
1. Limit the amount of publicly available information about yourself online. This can be done by adjusting your privacy settings on these platforms.
2. Be highly skeptical of unsolicited investment offers, especially from those you have just met.
3. If an offer comes from a friend, family member or someone you trust, consider checking the offer's legitimacy by contacting the individual by phone or in-person.
4. Watch for the most common red flags of fraud, including pressure to invest, guarantees of high returns, and investment offers in cryptocurrencies.
5. Do not take up investment offers from someone not registered with the Alberta Securities Commission. You can verify registration at CheckFirst.ca/check-reg.
While social media and dating apps have made it easier for individuals to connect, they also provide opportunities for scammers to target unsuspecting victims. By being aware of the tactics used by scammers and taking steps to keep your personal information private, you can better protect yourself from falling victim to online investment and romance scams.
Author: James MacTavish
Senior Advisor, Investor & Industry Education
Alberta Securities Commission