Hundreds of people are defrauded every year in Québec. Be careful!
Fraudulent on-line trading platforms look real and are well-designed. The professed dealers are courteous, polite and convincing. Some will even use the name of a registered individual and refer you to our register of individuals authorized to practise, so that you can check it.
The administrators of the fraudulent platforms use many other strategies to lend credibility to their operations:
- They offer a line of financial products that are relatively simple (e.g., currencies and shares in companies such as Amazon, Google and Apple) or complex (e.g., binary options, derivatives on cryptocurrencies and contracts for difference). The products offered change with current trends and tend to be the ones generating the most media interest.
- They provide access to known on-line trading tools like MetaTrader 4.
- They are active on social media platforms like Facebook and Twitter.
- They post positive testimonials on websites (e.g., user communities and blogs) and social media platforms (e.g., Reddit).
- They reply systematically to victim testimonials and investor warnings. If someone complains, for example, they say that the losses the person suffered resulted from bad investments, not fraud, or that the platform is managed by qualified and skilled people.
- They make people sign credible administrative documents such as investment insurance contracts or releases and discharges in the event of loss..
Don’t rely on appearances!
Fraudulent platforms are well-designed and look polished because investors place a high value on the credibility of the firms they do business with.
Here is an example:
Check the warning list of websites and companies that solicit investors illegally.End of the warning
Take steps to confirm the identity of the person you are speaking with. For example, call the person back at the number listed in our register (not the number they gave you).End of the insight
A typical fraudulent platform
- Well-designed website that looks professional and polished
- Access to known on-line trading tools like MetaTrader 4
- Offers known financial products; adapts quickly to trends
- Using a credit card to invest is NEVER recommended
Personalized and insistent solicitation
The scammers seem as if they are looking to get you the best offer (e.g., promotions, bonus). In reality, they are trained in pressure sales tactics. While they may sound Canadian, they usually telephone or text people from a call centre (boiler room) located overseas (e.g., Southeast Asia), not from a known reputable firm.
The experienced “dealer” will help you open your account and then ask you to make a deposit by credit card, pre-loaded card or bank transfer while enticing you with a promise of easy, lucrative returns. He or she will try to confuse you by using specialized jargon and making all kinds of recommendations requiring ever larger deposits (e.g., this stock is going to “take off” so you have to get into the market right away). Documents drafted in almost flawless English may make you believe you’re dealing with professionals, but beware: the masterminds behind these scams are dishonest and ruthless..
Getting your money back may be very difficult, if not impossible
Once you deposit money in the account you opened, regardless of what the “firm” allows you to see as your balance on its transaction platform, there are no safeguards or controls in place to protect you.
Some platforms will let you withdraw a portion of your money as a way to build trust. After you make the withdrawal, they will use other strategies to get you to deposit a larger amount that you will not be able to withdraw.
You could find yourself in the same situation as hundreds of other Québec investors who have been defrauded, each of whom, according to the latest statistics, was swindled out of an average of $20,000. For example, in August and September 2018, FSM Smart defrauded some 15 people out of around $250,000. This amount reflects only losses that were reported by victims who agreed to disclose the information to us. However, we received dozens of calls about this firm, leading us to believe that the losses are much higher.
- Research the investment product you are being offered
- Make sure the dealer is registered with the AMF and his or her phone number matches the one in the register
- Ask for the AMF’s opinion about an investment platform or adviser
- Check the warning list of websites and companies that solicit investors illegally
- Be wary of promises of high returns on low-risk investments
- Report any cases of fraud or potential offences to the AMF
RecommendedEnd of the insight
- Send money to anyone you don’t know on the basis of an unsolicited call or e-mail
- Make a hasty decision or decide anything under pressure
- Give out sensitive personal information, such as banking information, the number of your driver’s licence or details from a utility bill.
- Invest with a dealer that isn’t registered with the AMF
- Making an investment using your credit card
Doing whatever it takes to convince you to keep on investing
Some sites will try to conceal the appropriation of your money by letting you believe that you’ve made bad investments and have lost everything. Others will simply ignore you and refuse to refund your money. They might also offer you VIP service or insurance to cover your investments. All such offers are simply ruses to get more money from you.
These fraudsters will let some time pass before dropping you. Their sole objective is to let the time limit pass for cancelling a transaction or reporting credit card fraud. In many cases, they will take of advantage of this period, when you believe that your money is safe in your account, to transfer the funds to a country that has no agreement with Canadian authorities.
Example of fraudulent on-line advertising
If you have any doubts, call us!
If you have the slightest doubt about the legitimacy of investment platforms or advisers that are actively soliciting you, don’t hesitate to contact our Information Centre to check whether they are registered.
Are you a victim of fraud? Report it!
If you are a victim of fraud or have witnessed suspicious activity, notify the AMF now.End of the Information