The Manitoba Securities Commission (MSC) is emphasizing the importance of reporting fraud.

Between January and September of 2021, Canadians lost millions of dollars to investment fraud. Yet, only five per cent of frauds are being reported. According to the Commission, as common as investment fraud is, it is very difficult for people to talk about. And yet, fraud thrives in the darkness, meaning there are good reasons to talk about investment scams.

Ainsley Cunningham is Manager of Education and Communications with MSC. She says investment fraud is one of the most common types of fraud in Canada. It comes in all kinds of forms, including telephone calls, yet many times it does not at all look like a scam.

David Cheop, who is Chair of the Commission, says investment fraud is really just a type of fraud under the broad category of fraudulent transactions. He says essentially it is fraud that involves a financial element.

Cheop says first and foremost, the key ingredient to fraud is trust.

"Almost always there is a relationship where a person, for whatever reason, trusts somebody else and it's that person who is soliciting them for an investment," explains Cheop.

Jason Roy is a Senior Investigator with MSC. He says there are multiple starting points for how Manitobans fall victim to scams. For example, they could get an unsolicited telephone call, unsolicited email or they may enter some information on a website. Like, that post you see hinting at how you too can make as much money as Elon Musk. It then gets you to click on a link, which brings you to a website, you type in your information and then get a call or an email from the boiler room. The boiler room is simply a term referring to an overseas call centre where a team of scammers works together to pitch phony investments.

Laura Tamblyn Watts is CEO of Canada's National Seniors Advocacy Organization. She says the fraudsters in the world are strip-mining all of your information and adding it to what is referred to as the Sucker List. For example, when Bob gets caught up in fraud, he has divulged his name, Social Insurance Number and banking information but also anything about himself such as what he particularly responds to. This information is then being captured and sold for an average cost of between $5 and $10.

"So other companies, organizations or fraudsters will purchase this information in the same way that there is a market for clean information," she says.

In some cases, older people have been so taken advantage of, that they are receiving up to ten calls a day. Fraudsters know they are somebody who can be swindled and are more likely to be taken advantage of again. Watts says this is not something unique to only seniors or people with low education or linguistic issues.

"This is surely happening to all of us because fraudsters only stay in business if they are better than we are," she says. "It could be an online order that you did via Instagram, could be a link that you pushed, it could be tickets that you bought for something that didn't really exist, frauds exist big and small."

According to the Winnipeg Police Service, during the pandemic there has definitely been an increased number of individuals falling victim to mass-market scams like romance scams. Police say people are out of work and are therefore trying to find a way to survive. Plus, they are at home more often on their computer working on online relationships instead of being out with friends. This is creating more opportunities for people to fall victim to these scams.

"There is no romance at the end of the day, it's just a way to provide an introduction so that they can then scam you," says Jason Roy. "I've heard from numerous victims that have been victimized by initially putting their information on a dating app or a dating website."

Police say in some cases, an individual's social media account will be hacked and then the fraudster will post a story about how he or she just turned $600 into $6,000. This will pique the interest of followers and suddenly the fraudster finds new victims.

"I get hundreds and hundreds of calls from victims every year," says Roy. "One of the most difficult moments that I've had in my career was talking to a family in Edmonton after an individual had committed suicide because of the fact that they had lost $300,000 and their retirement in a binary options scam."

With March being Fraud Prevention Month, the MSC is again urging victims not to stay silent. As mentioned earlier, the Canadian Anti-Fraud Centre estimates only five per cent of frauds are reported and fraud thrives in the darkness.