Investment fraudsters continue to approach Canadians, CSA data show
About 3% of those approached by investment fraudsters say binary options websites introduced them to the fraudulent opportunity.
Investment fraudsters continue to target Canadian investors, according to new data released earlier today by the Canadian Securities Administrators (CSA).
The online survey consisted of a representative sample of 7,271 Canadians, 18 years or older. This survey was conducted between August 28, 2017 and October 2, 2017 in both French and English. The online sample was also weighted by the results of a August-September 2017 national telephone survey of 1,330 Canadians, 18 years of age or older.
The results indicate that Canadians are still being approached with fraudulent investment opportunities, although the number has decreased compared to preceding years. One-in-five (18%) say they think they have been approached with a fraudulent investment opportunity, down from 22% in 2016 and 27% in 2012.
Frequent investors (22%), those with high knowledge (23%) and young Canadians 18-24 (24%) are the most likely to say they have been approached with a fraudulent investment. Email is identified as the most common way respondents were introduced to the fraudulent opportunity (44%), whereas 3% of the respondents said they were introduced to a scam by a binary options website.
Let’s note that CSA spearheaded an effort to ban binary options in Canada earlier this year. This effort has led to particular results, as in September, the CSA moved ahead with the implementation of the proposed regulatory mechanism to prohibit any form of marketing and offering of binary options to Canadian residents.
The ban covers all sorts of “binary options”. It applies to binary options, regardless of the specific name. This means that the prohibition will cover (list is not exhaustive) “all-or-nothing options”, “asset-or-nothing options”, “bet options”, “cash-or-nothing options”, “digital options”, “fixed-return options” and “one-touch options”. The prohibition covers advertising, offering, selling or otherwise trading a binary option with or to an individual.
Of those Canadians who reported that they had been approached with a fraud, just one third reported it to the authorities. Those approached via the Internet were the most likely to report (54%) while those introduced to the fraud by someone they know – affinity fraud – were the least likely to report (only 23% did).
These results are in tune with recent findings published by the UK Financial Conduct Authority. A survey has shown that 22% of over 55s surveyed who suspect they have been contacted about a fraudulent investment in the last three years, did not report about it. The most common reason cited for not reporting was not knowing who to report to (49%).