Investors across Canada are being urged to stay on high alert as recovery scams surge, according to warnings from the Canadian Anti-Fraud Centre (CAFC) and the Canadian Investment Regulatory Organization (CIRO). These scams, which doubled in losses to over $1.6 million in 2023, prey on people who have already fallen victim to investment fraud, promising to return lost funds—but it’s just another trap.
A Scam on Top of a Scam
In recovery scams, fraudsters go after individuals who’ve already lost money in previous investment scams. Using lists of past victims, these crooks reach out via phone, email, social media, or even by manipulating search engine results to make themselves seem legitimate. They claim they can help recover the lost money—for a fee, of course. In some cases, they even request remote access to victims’ computers, furthering their crimes.
The outcome? Victims not only lose more money but could have sensitive personal information or access to devices stolen.
How They Try to Fool You
Fraudsters will go to great lengths to appear credible. Recently, they’ve been falsely claiming to represent CIRO or its predecessors, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association of Canada (MFDA). They may even pose as CIRO employees, but CIRO is clear: No employee will ever ask for payment from investors.
Unsure if someone contacting you is legitimate? CIRO advises investors to reach out to their Complaints & Inquiries team before sending any money.
Spotting the Red Flags
Investors are encouraged to take several precautionary steps to avoid falling for these scams:
- Don’t trust unsolicited offers to help recover lost money.
- Hang up if you feel pressured or uncertain during phone calls.
- Never allow unknown individuals remote access to your devices.
- Avoid paying upfront fees for promises of a refund.
- If you’ve been a victim, expect fraudsters to try again—they often target people who have already been scammed.
- Just because a website or business shows up at the top of an internet search doesn’t mean it’s legit.
CAFC and CIRO emphasize the importance of independently verifying information. Investors should always check the qualifications and background of advisors through CIRO’s free Advisor Report or the Canadian Securities Administrators’ National Registrant Search.
Protect Yourself from Further Fraud
If you’ve already provided personal information or allowed access to your computer, it’s crucial to take action right away. Protect yourself from identity theft by following key steps such as changing passwords and contacting your bank and local authorities.
Visit CAFC and CIRO’s websites for more tips on avoiding fraud, protecting your investments, and staying informed.
Quick Facts:
- Recovery scams accounted for over $1.6 million in losses in 2023, according to the CAFC. They estimate only 5-10% of victims report fraud.
- The CAFC is Canada’s central source for fraud data, intelligence, and resources, helping citizens, businesses, and law enforcement fight fraud.
- CIRO oversees all investment dealers and trading activities across Canada’s financial markets, aiming to protect investors and build trust in financial regulation.
If you think you’ve been a victim, don’t wait—contact your bank, local police, securities commission, and the CAFC immediately.
Stay vigilant and protect your financial future from these relentless fraudsters.