How Online Scams Work: Establishing Trust to Rope in Victims’ Money

Online investment scams have been on the rise, with scammers targeting individuals through social media and online communication. The method involves gaining the trust of the victim before persuading them to invest substantial amounts of money into a seemingly legitimate opportunity. However, once the victim invests their money, the scammer and the investment disappear, leaving the victim with significant financial losses. These scams, also known as “pig butchering,” have been increasing due to the rise of online communication and loneliness, which was exacerbated during the COVID-19 pandemic.

The British Columbia Securities Commission has issued a warning about the escalating threat of sophisticated online scams. Victims have reported losses totaling $46.4 million in 2023, a significant increase from previous years. However, the actual losses are believed to be much greater, with estimates suggesting hundreds of millions of dollars in losses in British Columbia alone. Various organizations, including the Canadian Anti-Fraud Centre and law enforcement agencies, are working together to educate the public about these scams and how to protect themselves.

One common tactic used by scammers is to offer to help victims recover their lost funds, but only if they pay additional money for taxes or fees. These promises are often empty, and victims end up losing even more money. To protect themselves, individuals are advised to be cautious of unsolicited messages on social media, avoid making investments based solely on online acquaintances’ advice, and be wary of promises of quick, large returns. Due to the international nature of these scams, investigating and prosecuting the perpetrators is often challenging.

Public awareness is crucial in combating these online investment scams, as it is difficult to recover lost funds once they have been sent to scammers. The scammers are typically located outside of Canada, with many operating in Southeast Asia and Africa. Agencies like the British Columbia Securities Commission are working to disrupt these schemes through public warnings and the removal of scam websites by internet providers. However, scammers quickly adapt their tactics, making it a continuous challenge to combat these fraudulent activities.

If you have fallen victim to an online investment scam, it is important to report it to the appropriate authorities, such as the British Columbia Securities Commission or your local police. By reporting these crimes, you can help protect others from falling prey to similar scams. Additionally, individuals can support journalism and stay informed by subscribing to trusted news sources like The Vancouver Sun and The Province. By staying informed and vigilant, individuals can better protect themselves from falling victim to online investment scams.