Many Albertans are not aware of the red flags to protect themselves against investment fraud, says the Alberta Securities Commission.

The Commission says that a recent survey found that while 75 per cent of Albertans are confident they can protect themselves against investment fraud, they struggle to identify common red flags.

“According to the survey, nearly half of Albertans believe fraud won’t happen to them. The survey identifies clear knowledge gaps when it comes to understanding the various ways investment fraud can be conducted,” said Hilary McMeekin, Manager of Communications, ASC, in a news release. 

“By understanding the common red flags of investment fraud and reporting fraudulent activity to the ASC, Albertans can protect themselves and others from falling victim to fraud.”

March is national Fraud Prevention Month.

The Commission says nearly half or more of Albertans could not identify some common red flags:

  • Promises of high returns with low risk (47 per cent);
  • “Exclusive” or “time-sensitive” opportunities (48 per cent);
  • Tax-free investments (82 per cent); and 
  • Celebrity endorsements (79 per cent).

The Commission says affinity fraud, where an introduction has been made personally through family, friends or acquaintances, is increasingly becoming more of an issue as the survey found that 20 per cent would be willing to put money toward an investment if it was recommended by friends or family, and 44 per cent are unlikely to follow up for more information when a personal connection shares financial information. Of those who have been approached with a potential investment scam, 22 per cent were introduced through a personal connection, it said.

“Albertans inherently trust investment recommendations from friends, family or community members, but unfortunately affinity fraud is a common tactic used by fraudsters that continues to impact Albertans every year,” said McMeekin. “Investors should be cautious and research every investment opportunity, even ones that come from those we trust. While not all investment opportunities recommended by someone you know are fraudulent, it’s important to be vigilant.”

The ASC advises Albertans to check out its website CheckFirst.ca for more information and tips about investment fraud.