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Home /
Office of the Investor /
Avoiding Fraud and Protecting Your Investments /
Safe or Scam: How to tell the Difference

Safe or Scam: How to tell the Difference

Being able to recognize fraud is the best defense against it.

Take this short quiz to test your awareness and see if you can spot the red flags of some common scams.

Terms of Use: This quiz is provided for informational and educational purposes only. It does not constitute financial or investment advice, nor should it be relied upon as such. When it comes to investing, we strongly recommend consulting with a registered investment advisor for personalized guidance.

I agree to the Terms of Use

1. A few months ago, you connected with someone on a dating site. Despite the fact they live overseas, and you have never met in person, there was an immediate attraction, and they tell you they love you.

One day you receive a message from them, and they seem upset. A family relative you've never heard about has been hospitalized. They ask if you might send them some money to help, saying they're stressed out since they can't afford the medical bills.

How would you respond in this situation?

Get their bank information and send a wire transfer as soon as possible Ask more questions about the sick family member Don’t send any money and stop communication with them

That’s not quite right.

You should never send money to someone you’ve never met. A request for money is often a sign of a scam.

That’s not quite right.

While it can be useful to prod for more information, fraudsters are master manipulators and have likely prepared a story to bait you even further.

Yes!

If someone you’ve met online asks for money, that’s a red flag. In this situation, it’s safest to end the relationship and stop all contact.

2. You see an opportunity advertised online to invest in a start-up company. This is a one-time, risk-free offer to purchase shares using money from your locked-in retirement savings. You are guaranteed high dividends and a complete return of your investment, free of fees and taxes. This sounds too good to be true, especially because you know that you will be taxed when you make a withdrawal.

How can you tell this is a scam?

You’re promised high dividends risk free and without paying fees or taxes You found this opportunity online It’s advertised to people with retirement savings

Yes!

If you’re promised a high return on a risk-free, no-fee investment it’s most likely a scam. In this situation, it’s safest to end the relationship and stop all contact.

That’s not quite right.

Scammers use promises of high returns with no risk to convince you to invest. If you see an opportunity that’s too good to be true, look into it first.

3. You get a message from an unknown number. The person on the other end claims to be your grandchild and is in trouble. You have the following chat:

Scammer: Grandma it’s me! I am in trouble and need help.

You: Oh no! Are you OK?

Scammer: I got into a car accident and need money to fix the car. If Mom and Dad find out I’m in so much trouble.

You: Oh my! OK, how much do you need?

Scammer: $250. Can you send me a wire transfer?

How would you respond?

Offer to send them an e-transfer instead Ask for the account details to send the money Call them directly on the number you have to confirm

That’s not quite right.

One red flag of a scam is being asked to keep a secret. By involving others, it becomes more likely the fake story is exposed as a fraud.

Spot on!

If you get a call or text message from a number you don’t recognize saying they are someone you know and asking for money, stop communicating and contact that person directly to confirm.

4. You come across a TikTok video in which a finfluencer showing himself living a lavish life and lots of wealth, claims to know the method for getting rich quick with crypto. He asks people to trust him with their money so he can invest it on the platform that made him so wealthy.

You should:

Invest a large amount right away. Ask a friend to invest for you. Invest a small, “trial” amount. Distrust or ignore the finfluencer.

That’s not quite right.

Watch out for those on social media who say they've suddenly become wealthy. It is a common tactic used to make you feel the fear of missing out (FOMO) if you don’t invest with them.

Spot on!

Beware of people on social media who claim to have gotten rich quick.

5. Scammers of affinity fraud target groups such as clubs, associations, ethnic communities, and religious organizations.

Select the illustrations below that are examples of affinity frauds:

A. The scammers may offer you “faith-based” investments exclusive to your ethnic community or religious group.
B. An unregistered advisor claims affiliation to a certain faith or religious organization and is pushing a high-return, no-risk investment opportunity.
C. Someone new to your group is name dropping or encouraging influential people to help them attract investors.

A Only B Only C Only All of the above None of the above

That’s not quite right.

Spot on!

Affinity fraud is where scammers are (or pretend to be) members of a group of people who share certain interests, values or religious beliefs, in order to identify potential victims to defraud.

6. While scrolling through your Facebook feed, you come across a video of a news team you recognize running a story on an exciting investment opportunity. They even show a video of a celebrity endorsing the investment.

You should:

Invest because it’s endorsed by a well-known news team and celebrity Examine the audio and video closely and report it as potential fraud Share with friends ASAP before too many people jump on the investment opportunity

That’s not quite right.

With the help of artificial intelligence (AI) anyone from anywhere in the world can create videos to impersonate the people you trust. Just because it looks and sounds like the real thing doesn’t mean it is.

Spot on!

Although AI-generated videos are advancing every day, they often leave clues they’re fake. When in doubt, report it as potential fraud to be reviewed by professionals. Common giveaways:

WHAT people say does not match HOW they say it (watch mouth movements closely)
Strange facial expressions/movements
Lighting and shadows don’t align with what you would expect
Odd hand and head movement (current software is poor at copying human hand movements and rarely shows people’s side profile).

7. Which of the following are not commonly impersonated by scammers?

Family members Trusted businesses Family dog Charities Government agencies

Sadly, impersonating family members is an easy way for scammers to gain your trust

Be careful.

Scammers can abuse actual company logos and set up real looking websites.

Correct!

Scammers will try to impersonate all types of people and organizations; however, Fido is safe for now.

It’s unbelievable, but scammers like to impersonate charities.

Always check out an organization before giving money. The Government of Canada’s website is a great place to start (https://www.canada.ca/en/services/taxes/charities.html).

Scammers enjoy impersonating government agencies like the CRA or Canada Post.

Remember, these agencies will never call or email you asking for money. If in doubt, call the number on your statement or the agency’s official website.

8. Scammers may pose as fictitious Financial Advisors or firm, promising high returns with low risks. They may even know information about you – taken from social media – and urge you to transfer funds or share personal financial information. These scammers are hoping that you fall for the too good to be true opportunity and scam you out of your funds.

Select all the ways you can help protect yourself against these types of impersonation scams.

A. Be skeptical.
B. Research before investing.
C. Use official investing apps.
D. Be wary of unusual requests.

A Only B Only C Only D Only All of the Above None of the Above

That’s not quite right.

You Got It!

If an investment opportunity seems too good to be true, it probably is.

Carefully look into any investment opportunity and the individuals or companies involved. Check for official qualifications.

Official investing apps from registered investment firms.

If an investment opportunity seems too good to be true, it probably is.

You scored on this Quiz!

Welcome to CIRO.ca!

You can find the Canadian Investment Regulatory Organization (CIRO) at CIRO.ca with our fresh look and feel.

The following sections of the legacy mfda.ca and iiroc.ca sites have been migrated to ciro.ca:

Enforcement
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A unified member directory (Dealers We Regulate)
Advisor Report

We will continue moving items off MFDA and IIROC in 2024. Stay tuned for future updates.

Visit the Canadian Investment Regulatory Organization website

In this section:

Safe or Scam: How to tell the Difference

Office of the Investor

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