We strive to provide you with useful information on how to be a savvy investor. When it comes to investment fraud, the more you know about what to look for and be wary of, the better prepared you will be if you get approached with an investment opportunity.
BlueHedge: Online Fraud Campaign
The Canadian Securities Administrators (CSA) has been actively promoting a fictional investment company, BlueHedge Investments that simulates a fraudulent company’s website, and any visitors who click through to invest are taken to an education “reveal” website which contains information on how to recognize and avoid investment fraud.
Results of the campaign confirmed that investors remain vulnerable to online investment fraud. Internet ads and unsolicited emails posted during the online campaign enticed many visitors to the phoney scam website set up by the regulators.
Bill Rice, Chair of the Canadian Securities Administrators (CSA) and Chair and CEO of the Alberta Securities Commission said, “This campaign showed us that people are willing to click on online ads and open emails touting investment opportunities from unknown sources. Investors need to be more wary when dealing with investment opportunities they see advertised online. ”
During the 10-week campaign, the BlueHedge website received nearly 18,000 visits from across Canada with 71 per cent arriving to the site because they clicked on online ad. Regulators found that more than 10 per cent of those who received unsolicited emails from BlueHedge opened the emails, and of those, almost 13 per cent clicked on the provided BlueHedge links.
“Our enforcement teams across the country have firsthand knowledge of how unscrupulous promoters are turning to the internet to market their fraudulent investment opportunities and the threat these online investment scams pose to Canadian investors,” said Rice. “Canadian securities regulators felt it was important to address these tactics head on and educate potential investors in the same spaces where fraudsters solicit their victims.”
How To Spot An Investment Scam
Investors should be cautioned to ensure they know who they are doing business with when considering investments pitched through social networking sites.
For those who were intrigued by the BlueHedge offering and tried to provide their personal information or clicked on an ‘Invest Now’ link, regulators provided information and tools such as the five red flags to recognizing an online investment scam:
- Guaranteed high returns, no risk
- High pressure sales tactics to invest right away
- Tax-free and offshore
- Slick appearances that don’t measure up
- Lack of quality information
The education website, www.BlueHedgeIsntReal.ca, provides quick tips for would-be investors, including a five-minute primer about five things to do to arm yourself against a persuasive pitch from an investment scam artist:
- Know your goals
- Know who you’re dealing with
- Know your investments
- Know the red flags of fraud
- Know where to go for help
Both the BlueHedge Investments website and the education website, remain active, serving as investor education resources.
Throughout Fraud Prevention Month in March, people are urged to visit BlueHedgeIsntReal.ca to assess their investment scam savvy and use the social media tools provided to help share the information and “Warn a Friend” so they can also test their online investment fraud awareness.