Jimpro63 wrote: 2019-03-05 12:44 ET - News Release
Mr. Doug Muir reports
MOST B.C. RESIDENTS OVERLOOK AT LEAST ONE WARNING SIGN OF INVESTMENT FRAUD
Fewer than half of British Columbians recognize all of the warning signs of investment fraud, according to a new study commissioned by the British Columbia Securities Commission (BCSC).
When presented with six scenarios associated with investment fraud, only 44 per cent correctly identified all of them as warning signs:
- Guaranteed high returns with little or no risk;
- Moving money outside the country to avoid tax;
- A strong push to act now;
- An offer of inside information;
- An offer available only to a select few;
- Being encouraged to invest because friends and family have already done so.
A recommendation from friends or family was the least-recognized sign, with 61 per cent of British Columbians flagging that as an indicator of a possible fraudulent investment. The most recognized warning sign, chosen by 77 per cent, was a guarantee of high returns with little or no risk.
"B.C. residents aren't naive when it comes to investment fraud, with 65 per cent correctly identifying at least four of the six warning signs," said Pamela McDonald, the BCSC's director of communications and education. "But one missed sign is sometimes all it takes for someone to be victimized."
Twelve per cent of British Columbians said they have sunk money into a fraudulent investment, with men being more than twice as likely as women to say they were victims of investment fraud. Among those who said they were victims, a slim majority (53 per cent) said they lost less than $5,000.
Residents of Vancouver Island were most likely (55 per cent) to recognize all six warning signs, compared with 41 per cent in the Lower Mainland/Fraser Valley region.
Men and women in British Columbia are roughly equal in their ability to spot warning signs, but age appears to bring wisdom, with 65 per cent of people over 55 years old being most likely to identify all six scenarios as warning signs, compared with 20 per cent of 18-year-olds to 34-year-olds.
British Columbia residents who are do-it-yourself investors or using robo-advisers were significantly more aware (68 per cent) of all six warning signs than investors who work with banks or financial advisers or who invest in something other than securities.
British Columbia residents are much more likely than not to agree that fraud is worth reporting. When presented with the statement, "Reporting a fraudulent investment is more trouble than it's worth," 59 per cent disagreed while 16 per cent agreed.
"We are encouraged to see that most people are willing to report investment fraud, rather than just letting it go," said Doug Muir, the BCSC's director of enforcement. "Our investigators need the public's help. The sooner we know about scams, the better our chances of preventing further losses."
To report possible investment fraud in British Columbia, contact the BCSC by telephone (604-899-6854 or 800-373-6393), by e-mail (inquiries@bcsc.bc.ca) or by filling out an on-line form.
Test your own ability to spot suspicious investment opportunities on the Invest Right website.
The on-line survey was conducted by Innovative Research Group among a representative sample of Canadian and British Columbia respondents from Dec. 7 to Dec. 28, 2018. A total of 2,915 Canadians 18 years of age and over completed the survey, which included an oversample of 1,407 British Columbians. The results are weighted to a representative sample of 1,500 at the national level, and the British Columbia oversample is weighted to a representative sample of 1,000. Weighting is based on age, gender and region using the latest available census data to reflect actual demographic composition of the population. Complete methodology and results are available in the investment fraud survey report.