February 2020 Survey Results Reveal Albertans Struggle to Identify Red Flags
CALGARY, March 9, 2020 /CNW/ - Albertans cannot protect themselves against investment fraud if they do not know the signs. A recent survey conducted by the Alberta Securities Commission (ASC) found that 75 per cent of Albertans are confident they can protect themselves against investment fraud, yet struggle to identify common red flags. In association with national Fraud Prevention Month in March, the ASC is sharing these findings to encourage Albertans to learn more.
"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. "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."
Nearly half or more of survey respondents were unable to specifically identify common red flags, including:
- Promises of high returns with low risk (47 per cent).
- "Exclusive" or "time-sensitive" opportunities (48 per cent).
- Tax-free investments (82 per cent).
- Celebrity endorsements (79 per cent).
Affinity fraud—a fraudulent opportunity introduced through a personal connection—is an issue. Albertans say their immediate family and close friends are among the most trusted sources of investment advice. The study found 20 per cent of those surveyed indicated they 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. Yet of those who have been approached with a potential investment scam, 22 per cent were introduced through a personal connection.
"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 urges Albertans to be aware of the red flags and take simple steps like conducting research, seeking professional advice and visiting CheckFirst.ca to check an individual or company's registration to help determine if an investment is legitimate. Additionally, Albertans should report any attempted, ongoing or past investment fraud to the Alberta Securities Commission to help prevent others from falling victim.
Fraud Prevention Month is a national awareness campaign, meant to educate Canadians on how to recognize, reject and report investment fraud. The ASC works year-round to educate Albertans on how to spot the red flags of investment fraud and protect themselves against it. Visit CheckFirst.ca to learn more about investment fraud and to access a wide range of free, unbiased tools and resources designed to help Albertans increase their financial knowledge and make wise investment decisions.
The survey was conducted online through the Angus Reid panel between February 14 and 19, 2020. It polled over 1,000 Albertans, aged 18+ to understand their knowledge and awareness of investment fraud, with the aim to address knowledge gaps, better equip Albertans to spot signs of potential investment scams and protect their financial wellbeing.
The ASC is the regulatory agency responsible for administering the province's securities laws. It is entrusted with fostering a fair and efficient capital market in Alberta and with protecting investors. As a member of the Canadian Securities Administrators, the ASC works to improve, coordinate and harmonize the regulation of Canada's capital markets.
SOURCE Alberta Securities Commission
For further information: For Media Inquiries: Susan Soprovich, Senior Advisor, Investor Education, 403.592.3058; For Investor Inquiries: ASC Public Inquiries, Toll Free 1.877.355.4488