--- title: 4 common investment scams and how to avoid them date: 2025-11-03T08:38:00-05:00 canonical_url: "https://grantthorntonlimited.ca/en/debt-help-resources/articles/article-4-common-investment-scams-and-how-to-avoid-them" section: Articles --- [ Back to the hub ](https://grantthorntonlimited.ca/en/debt-help-resources/articles) # 4 common investment scams and how to avoid them ![Woman on the phone holding a credit card](https://pr-assets.grantthorntonlimited.ca/craftcmsimages/Article-imagery/_articleHero/46489/Investment-scams-square.webp) Online banking, cryptocurrency, and AI have opened doors to exciting financial opportunities—but it’s also created a playground for scammers. Last year, Canadians lost $643 million to fraud, [according to the Canadian Anti-Fraud Centre.](https://www.cbc.ca/news/canada/toronto/crypto-investment-fraud-1.7407734) Keep reading to learn more about common investment scams and how to avoid them. ## Cryptocurrency scams Cryptocurrency is a digital form of money that’s not backed by any government or central bank. Unlike traditional investments or bank accounts, crypto doesn’t come with built-in protections. Scammers love crypto because the transactions can’t be cancelled or reversed once completed. Once it’s gone, it’s nearly impossible to recover. And even though crypto is not completely anonymous, online crypto wallets are not directly tied to a person's real-word identity, making it easier to conceal identities and commit fraud. Pump-and-dump or rug-pull schemes are common cryptocurrency scams. This is when scammers buy up a low-value crypto coin (or stocks) and heavily promote it online as an amazing investment opportunity. Then they watch the price soar as others start giving into the FOMO and buying shares. As more people buy, the value of the investment continues to increase and drives the price higher. Then the scammers sell their shares to gain a huge profit while massively dropping the value of the investment. Avoid this common scam by ignoring investment advice from strangers—even celebrities—and by doing your own research before buying. Make sure you are buying and trading your crypto through a regulated trading platform. Cryptocurrency is tightly regulated in Canada, and trading platforms must [register with provincial securities regulators](https://www.canada.ca/en/financial-consumer-agency/services/payment/digital-currency.html), such as the Ontario Securities Commission (OSC). This is different than being a registered business. To identify legitimate trading platforms or companies, use the [National Registration Search](https://www.securities-administrators.ca/investor-tools/are-they-registered/) through the Canadian Securities Administrators (CSA). ## Ponzi schemes Ponzi schemes have taken many forms over the years but have found a new life in the crypto and investment space. A Ponzi scheme involves a scammer contacting potential investors to back a project—like a new cryptocurrency. They ask for money promising to use it to develop the project but end up either paying out earlier investors or just pocketing the money for themselves. Even if some investors do make money from a Ponzi scheme, it requires a constant stream of new investors. Since no coin or company actually exists, it will eventually collapse, and the scammer will disappear with the collected funds. Watch out for these signs of a Ponzi scheme: - **“Guaranteed” returns:** If it sounds too good to be true, it probably is. All legitimate investments have some risk, so if someone promises their company or coin is a “guaranteed” investment—be suspicious. - **Pressure to act fast:** Scammers want you to skip due diligence. You may be pressured to “act now”, but this is just another technique to make you hand over your information and money before doing proper research. - **Lack of documentation:** Legitimate companies will have a paper trail. Research the creator and any associated businesses. They should have some sort of background and registration with the industry or country they claim to operate in. ## Fake investment apps and websites With website and app building tools becoming more accessible, it’s easier than ever to make a professional looking website or app which can be dangerous in the hands of scammers. You can stumble across these by merely browsing online, or a scammer might contact you directly. They’ll often reach out through social media and may even try to build a connection before suggesting you make an investment. To make it look more legitimate, they’ll direct you to an app or website rather than buying directly through them. Don’t fall for it. These websites are just a way to collect your information and money. The system will prompt you to enter your personal details and financial information to “buy” investments, but if you ever try to take your money out, it could be next to impossible. Scammers often block the app or website from returning funds or hit you with massive fees and “taxes” that negate your earnings. These types of scams are more complex versions of phishing scams, but here’s a few ways to avoid them: - **Double check URLs and logos for subtle errors.** Scammers will often impersonate real companies, but their URLs will have misspellings or slight differences from the original. - **Avoid encrypted chats with new online contacts.** Scammers often find victims through social media but don’t like to stay there because it’s more traceable. Encrypted chats allow them to hide their identity and disappear with your money. - **Don’t** **click links from strangers.** If they send you a link claiming it’s from a known company or website, look it up yourself. If you can’t find it—be suspicious. ## AI scams The use of artificial intelligence has brought massive changes to many industries, even scamming. Voice imitation and deep-fake technology have made it easy to impersonate people online. Scammers can take audio or video of a loved one from social media and impersonate their voice and face. You might get a frantic call from a family member needing money for a tow truck after a flat tire, or something as extreme as a kidnapper asking for ransom with your child supposedly on the phone. With AI, these voices can be incredibly realistic and even have full conversations. Take these precautions to protect your finances and loved ones: - **Set up a codeword.** Establish a codeword or question that only you and your loved one know the answer to. If you receive a call like this, AI wouldn’t be able to answer correctly. - **Don’t** **panic.** Scammers mimic high pressure situations to convince you to give them money without thinking. Take a second to think about the situation. When was the last time you spoke to this person, and is it realistic that they could be in danger? Consider hanging up and calling them back at their number. Sometimes scammers will “spoof” a loved one’s phone number to add realism, but if you call their number directly from your contacts, it will reach your loved one instead. - **Call the police.** If you can’t reach the supposed victim yourself or suspect they might actually be in danger, consider calling in a wellness check to make sure they’re alright. If it really is a dangerous situation, you shouldn’t be dealing with it alone. AI doesn’t just impersonate existing people; it can also create entirely new identities to scam people into believing they are in a loving relationship and handing over their life savings. To learn more about the dangers of romance scams and how to avoid them, [check out our article.](https://grantthorntonlimited.ca/en/debt-help-resources/articles/4-ways-to-spot-and-avoid-romance-scams) ## What do I do if I’ve been scammed? It’s okay to make a mistake—scammers work hard to perfect their tactics, and it’s becoming easier to make their scams believable. If you’ve fallen victim to an investment scam, it’s important to act immediately. - **Contact your bank and credit bureaus.** Freeze any accounts or cards that scammers may have accessed and check your credit report to make sure that no new accounts have been opened in your name. - **Report** **the scammer.** Report any social media profiles, names, emails, websites, and apps associated with the scammers to the Canadian Anti-Fraud Centre. Report social media accounts directly on the platform as well—this can lock their account and prevent them from using it to scam others. With the growing sophistication of investment scams, Canadians continue to lose hundreds of millions of dollars to fraud every year. In response, the Government of Canada recently announced the introduction of Canada’s first-ever whole-of-government National Anti-Fraud Strategy and a new Financial Crimes Agency to lead Canada’s efforts in combatting sophisticated financial crimes. [Learn more about how the Government of Canada plans to protect Canadians from financial scams and abuse.](https://www.canada.ca/en/department-finance/news/2025/10/minister-champagne-takes-aim-at-financial-scams-and-abuse-announces-anti-fraud-strategy-and-new-financial-crimes-agency.html) If a financial scam has left you in debt—you’re not alone. Many Canadians struggle to recover financially after being scammed. 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