Written by Kelley Keehn
Wednesday, March 23rd, 2022
What's worse than being scammed once? Twice, of course. Unfortunately, this happens to one out of every three victims of fraud.
How the Second Scam Happened
Ethan (name changed to protect his identity) was devastated when he was victimized in an overseas investment scam. Not only was he embarrassed, but he was financially destroyed when he eventually realized the $30,000 he parted with would never again be recovered.
Imagine the hope and vindication he felt when months later he thought the RCMP and his bank were contacting him to help track down his assailant and money.
Unfortunately, both the call from the "RCMP" and the one from his "bank" weren't legit and in fact were the fraudsters swooping in for another attack. Ethan parted with another $10,000 before he realized the scam. Today, he's slowly working to build back the pieces of his mental health, identity and financial losses.
Fraud Can Happen to Anyone
You may think Ethan was naïve, and that he shouldn't have fallen for the first fraud, let alone the second. But the fact is that scammers are much more targeted, sophisticated, and patient than most people could ever imagine. Because of that enduring nature, they're invested in the victims they lock on to.
Fraud is Increasing in Canada
“Sadly, many people are affected by fraud. In general, 1 in 25 Canadians report being a victim of investment fraud. And about 1 in 5 say they've been approached about a potential fraud," said Tyler Fleming, Director of the Investor Office with the Ontario Securities Commission (OSC).
"There's a lot of fraud we don't hear about – people are just too embarrassed or hurt to come to us, and not everyone reports they have been victimized twice, since they are often ashamed and embarrassed. But about one out of every three victims of fraud have fallen for a scam promising to get their money back from a previous scammer."
Can Victims Get their Money Back?
“We regularly hear about all kinds of scams, and unfortunately fraudsters tend to spend the money as fast as they get it – so victims are unlikely to get their money back," said Fleming.
"Being a victim of a scam can be devastating, not just financially, but emotionally. It's traumatic to lose money to a scammer, maybe even your life savings. And this can be magnified in cases where a person has fallen for a scam a second time."
Protect Yourself Before Parting with Your Money
“We always recommend that investors check registration of any person or business trying to sell you an investment before you invest. Investment fraud can be easy to recognize when you know what it looks like," said Fleming.
"Watch for common warning signs of fraud, including: promises of high returns with little or no risk, offers of hot tips or insider information, or being pressured to buy and make a quick decision."
Red Flags to Look Out For
Tyler cautions if you've been a victim of a scam, be very wary about anyone who contacts promising to get your money back.
“Let's say you lose your retirement nest egg to a scammer. You may not want to talk about it because you're mad and embarrassed. Imagine a few weeks later, someone calls you who is sympathetic, they'll tell you they can get your money back. But there's a catch — a cost to use their services."
"Don't share information with anyone unless you can confirm who they are. And never pay a fee to anyone promising to help you get your money back. We urge people to call the OSC Contact Centre if they have any suspicions at 1-877-785-1555. People can also visit our consumer website GetSmarterAboutMoney.ca for many more fraud prevention tips."