03/27/2024 | Press release | Distributed by Public on 03/27/2024 09:19
Vancouver - Law enforcement and government agencies are joining forces to warn British Columbians about the escalating threat of sophisticated scams that use extended online communication to earn people's trust before convincing them to invest in various types of investments, often involving crypto. The agencies include the BC RCMP Financial Integrity Program, the B.C. Securities Commission (BCSC), Burnaby RCMP, the Canadian Anti-Fraud Centre (CAFC), the United States Secret Service and the Vancouver Police Department.
These long cons employ social manipulation and financial grooming tactics to exploit the public's interest in - and incomplete understanding of - crypto assets, luring victims into handing over more and more money. The method has come to be known as "pig butchering" because it's akin to fattening a pig before slaughter.
Last year, British Columbians reported losses of $46.4 million from online investment scams to the CAFC, with most of those losses involving crypto. In the first seven weeks of 2024, B.C. victims have already reported losses of $1.3 million. The CAFC estimates that only five per cent of fraud victims report such incidents to authorities.
Fraudsters target victims through a variety of methods, including on social media, dating websites and text messages, often under pretense of a message that was meant for someone else. They may try to befriend the victim, develop an online romance with them or pretend to be legitimate investment advisers. Regardless of the specific method, the perpetrators develop relationships with the victims, often over a period of weeks or months.
Eventually, the scammer will recommend putting money into an investment opportunity, often involving crypto assets. Once the victim sends a substantial amount of money or crypto, the scammer abruptly cuts off contact.
In other cases, when the victims ask for their money back, the fraudster agrees to do so as long as they pay additional funds, supposedly for taxes and other fees and then disappears.
After the loss becomes apparent, the victims are often approached by a new person or organization who offer to help recoup their funds in exchange for a recovery fee. These offers are also fraudulent.
The perpetrators are often criminal gangs operating outside Canada.
Individual losses have reached more than a million dollars.
Red flags of long-term investment fraud and financial grooming:
What British Columbians can do to protect themselves:
Quotes:
Doug Muir, the B.C. Securities Commission's Director of Enforcement
"Fraudsters are experts at exploiting trust and manipulating their victims into losing potentially devastating amounts of money - but there are things you can do to protect yourself from becoming a victim. We want to empower the public with the knowledge they need to identify and avoid these sophisticated online investment scams."
Jeffrey Thomson, Canadian Anti-Fraud Centre's Manager of Operations
"In 2023, investment fraud cost Canadians more than $300 million in losses. The social and financial harms caused by these cyber-enabled frauds pose a significant threat to Canadians and the economic integrity of Canada. This Fraud Prevention Month the CAFC wants to encourage Canadians to develop and practice safe online habits to help them recognize, reject and report fraud."
About the B.C. Securities Commission (www.bcsc.bc.ca)
The B.C. Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:
Media Contact:
Elise Palmer
604-899-6830
Public inquiries:
604-899-6854 or 1-800-373-6393 (toll free)
[email protected]
Learn how to protect yourself and become a more informed investor at www.investright.org