Can you spot the 6 red flags in this video?
Unsolicited Contact with Casual Familiarity: The character starts with, “Hey! I’m Alex. I just got back from a business trip overseas. Thought we might have crossed paths.” This mirrors a common scam tactic where perpetrators establish false familiarity to quickly break the ice and build trust with victims
Frequent Travel Claim: By mentioning overseas business trips, the character creates an image of success and professionalism, which scammers frequently use to appear credible and sophisticated.
Promise of Doubling Investments: Claiming to have doubled or quickly increased their investment is a typical tactic to lure victims by presenting high and quick returns, which are often too good to be true.
Risk-Free, High-Return Claim: Offering a “risk-free 20% return” is a major red flag, as legitimate investments rarely guarantee high returns without risk.
Addressing Scam Concerns Directly: The line “Are you worried this is a scam? Listen, I’ve worked in finance for nearly two decades” is a common scammer tactic to preemptively counter skepticism by overemphasizing their credentials and reliability.
Offer to Provide Personalized Guidance: “Let me guide you through it, step by step,” plays into building a sense of partnership and mentorship, which is a manipulation tactic often used by scammers to foster trust.
Have you seen these flags in the wild?
If you encounter one or more of these flags, it is important that you report it. If you believe an individual or firm has violated securities laws, acted fraudulently or otherwise improperly, you should report it to your local securities regulator.
It is important that you report people or businesses that may have broken the law to the securities regulator in your province or territory. Securities regulators can investigate potential wrongdoing and impose sanctions on individuals and firms that violate securities laws.
Securities regulator can:
- outline the steps you can take to file a complaint against an adviser or firm.
- help you find information about investment products and services;
- provide free resources to help you;
- tell you if an adviser or firm is registered in your jurisdiction and check their qualifications;
- tell you if an adviser has been subject to disciplinary proceedings and if there are any terms and conditions on their registration;
- answer your questions if you suspect a fraud or scam;
- advise you on your options if you are concerned that something has gone wrong with an investment;
Tools to help protect yourself
A complete list of red flags is available on our website, we’ve identified 17 more red flags!
By boosting your investment knowledge, you will be better equipped to identify red flags and to avoid fraud. Here’s a list of tools that can help you:
- Disciplined List
- Cease Trade Orders
- Investor Alerts
- List of brochures for Investor Education and fraud
- Investing basics webpage