(Ottawa) – The Organized Fraud Section has seen an increase in crypto-currency investment scams and is warning residents to beware.
In most cases, suspects advertise investment broker services on a variety of social media platforms. When the victim reaches out for information, they receive regular calls, text messages and emails from the suspect. This leads people to trust the investment broker and, as directed, victims open an account at an online crypto-currency exchange service and make a purchase.
“The purchase of the crypto-currency is legitimate,” says Sgt. Chantal Arsenault of the Ottawa Police Organized Fraud Section. “However, when you turn your funds over to a third party who is a fraudster, they move your money, all the while leading you to believe they’re earning you a large profit. But that’s not the case.”
Victims are provided access to a fraudulent online investment account where they can log in with a username and password to watch their portfolio increase in value.
“This is how scammers entice their victims to keep investing,” says Sgt. Arsenault. “In most cases, victims don’t realize that the investment is fraudulent until they try to withdraw some of their money. Sometimes this is several weeks or months after the investment is made.”
Suspects use delaying tactics to postpone the withdrawal of funds and will tell the victim there is a large penalty fee in the thousands of dollars to access their investment.
“After they pay the penalty, they find all their money is gone,” says Sgt. Arsenault. “These funds are laundered using international crypto-currency money exchanges with no governing body, often out of reach for authorities, so it’s next to impossible to get the money back.”
Warning signs it’s most likely a scam:
- Brokers use WhatsApp texting app to contact you;
- The investor contacts you by using a variety of emails addresses and phone numbers;
- The text messages and reports contain grammar or spelling mistakes;
- An atypical formal salutation is used: for example, Mr. John instead of Mr. SMITH;
- The promise of large returns on your investment. If it sounds too be good to be true, it probably is.
“Don’t answer an ad on social media,” advises Sgt. Arsenault, “and always do your research. Would you hand your money over to someone on the street if they told you they can get you a big return on your investment?”
Check potential investment brokers through the Better Business Bureau and ask for references.
Legitimate brokers and companies have contact information and websites you can search for independently.
“Try searching phone numbers, broker names, company names and address with the word ‘scam’ added to your search,” says Sgt. Arsenault, “you may be surprised to find other victims have posted warnings to beware.”
Learn about common scams, what to look for and how to avoid them at ottawapolice.ca.