Romance scams in Canada shot up by 237% to $64 million in 2021
Techniques include approaching people via dating apps, messaging apps, or other social media sites, in order to develop an online relationship.
To celebrate Valentine’s Day, the Canadian Securities Administrators’ (CSA) has warned the public of the rise of fraudsters luring Canadians into online relationships that lead to investment scams
Investment scams and romance scams were the top two reported scams in 2021, according to data from the Canadian Anti-Fraud Centre (CAFC), which indicates that (reported) romance scams increased 24% year over year (1,546 in 2020 vs. 1,928 in 2021), costing innocent people over $64 million in 2021 compared to over $27 million in 2020.
Fraudsters are targeting people of all ages and demographics
Louis Morisset, Chair of the CSA and President and CEO of the Autorité des marchés financiers, said: “Fraudsters are becoming more sophisticated in targeting Canadians, particularly as we spend more time online. They are increasingly using social media and dating sites to manipulate people into establishing virtual friendships or romantic relationships and then requesting money for investment scams after building trust.
“Fraudsters are targeting people of all ages and demographics – it can happen to anyone. It is extremely important to recognize the signs of investment scams and always do your own research before you hand your money over to invest.”
Techniques include approaching people via dating apps, messaging apps, or other social media sites, and after developing an online relationship, the fraudster brings up an “investment opportunity” and convinces the person to make an initial payment. The fraudster is often able to convince victims to continue investing, which can lead to substantial losses.
Fraudsters are also able to take control of a victim’s friend’s social media accounts in order to pose as such and convince the person to invest, thus taking advantage of their trust: 25% of Canadians stated that they can usually trust someone who is promoting an investment if they have a friend who has already invested with them.
Fraudsters may claim that they will use a person’s money to buy investments, such as crypto assets, and cut off all communication once receiving the funds.