Attack of the clones: Five steps to staying vigilant against fake websites and investment scams

In today’s ever-evolving online world, we have become used to the convenience and intuitive experiences available through the internet. While these technological improvements have been game-changers in our daily lives, scam artists are increasingly taking advantage of our comfort and compliancy online to target us with websites impersonating legitimately registered banks and brokerage firms.

The act of “Cloning” or “Spoofing” is when fraudsters create fake websites that mimic a legitimate company’s website and information, often unbeknownst to them. These websites can even utilize the actual address and employee names from the legitimate company and can be promoted online through pop-up ads or found through search engine results.

Before you consider conducting financial or investing activities online, follow these key steps to avoid cloned websites and scams.

1. Avoid investments offered online or found through search engine results – Investment offers promoted through pop-up ads or found on search engine results can be fake. Be skeptical of promised attractive investment returns and take the time to do your research into the investment. Contact the bank or firm in the ad or search result using their legitimate phone number or website address listed on their registration found on the Alberta Securities Commissions registration list for Alberta-based firms and institutions and the Canadian Securities Adminstrators National Registration Search for those based in another province or territory in Canada. By law, firms and individuals offering investments to you must be registered in the province you live in.

2. Pay attention to the details – Before you provide any information, money, or log in to the website, review and make sure you have spelled the website URL correctly. If you found the website online or through an ad, pay attention to oddities, including spelling and grammatical mistakes, incorrect area codes, odd logos, stock photos, and chat functions requesting personal information such as an email address.

3.  Be wary of unusual forms of payment –
Fraudsters may try and correspond with you over social media like WhatsApp for the investment offer or request payment with cryptocurrency or wire transfers. These are red flags of fraud and legitimate investments are never conducted over social media and typically do not require payment in digital assets or wire transfers.

4. Be cautious of fraudsters posing as representatives –
Fraudsters may impersonate actual investment professionals, using their names, job titles, and even fraudulent credentials to offer various financial products and services over the phone and online. To further enhance this deception, fraudsters will even falsify documents, including particular statements or trade commissions and may even direct victims to check the firm’s registration or incorporation details. While the legitimate bank or firm is registered, you are not talking to an actual representative employed by them. Compare the website’s contact details with the contact details listed on the registration for the firm on the ASC registration list or CSA National Registration Search and contact the number listed in its registration to verify that you’re talking to a real representative.

5. Report recovery room scams – Fraudsters often target and contact those who have lost money with an investment scam, claiming that they will be able to retrieve their money for a fee. They may also claim there is a technical issue or tax fee and request more money from the victim to retrieve their funds. If you are contacted by someone offering to recover your investments or money, keep all records of communication with the individual and report it to the ASC.

Fraudsters are continually looking for new ways to deceive and imitate the registered banks and brokerage firms online. By staying vigilant and following the steps above, you can confidently recognize, avoid and report bad actors.

Client-focused reforms: Addressing material conflicts of interest in adviser-client relationships

Many Albertans work with a registered adviser to grow and maintain their wealth. To achieve the best results, clients must be open and transparent about their finances and goals and in turn, registered advisers must align investment portfolios and products to meet their client’s time horizons and risk tolerance.

To further enhance investor protection, improve the foundation of adviser-client relationships and standardize services of investment firms and advisers, the Canadian Securities Administrators, which includes the Alberta Securities Commission, published a comprehensive set of rules known as client-focused reforms on October 3, 2019. Under these reforms, conflict of interests provisions were partially implemented on June 30, 2021 with the remaining rules coming into effect on December 31, 2021.

What does client-focused reforms do?

Under client-focused reforms, registered firms and advisers are required to put the interest of the client first when recommending or choosing investments and resolve and avoid material conflicts of interests. Material conflicts of interests are factors that could influence the impartiality adviser’s should have when recommending investments. If there are any material conflicts, the adviser or firm must inform the client of the conflict in a timely fashion and detail how they are being resolved in their best interest.

What are the material conflicts that may occur with your registered adviser?

There are situations in which a registered adviser may have a material conflict of interest with clients. For example, there may be situations in which a registered adviser may be paid a higher commission for selling a certain type of investment, which may influence their decision on what to offer their client.
Alternatively, a firm or registered adviser could offer that client a similar product that is more cost-effective and suitable.

How to talk with your registered adviser about client-focused reforms and material conflicts of interest?

Talking with your registered adviser routinely is not only recommended for ensuring your investments are tracking towards your goals, but is an important step in taking an active role in understanding what you are investing in. Follow these key steps to strengthen your relationship with your registered adviser and address conflicts of interest as they arise:

  1. Ask questions and get satisfactory answers: If you are confused with what has been communicated, be sure to ask questions and only move forward when you have what you need to make an informed decision. Do not feel intimidated to ask questions, remember an adviser works for you after all.
  2. Discuss any conflicts of interests: Registered advisers should work on your behalf and in your best interest, so take the time when you meet or talk with them to understand if the investment products they are proposing, or you are already invested in, are right for you. If you feel there may be a product that is better suited for your goals, bring it to your registered adviser’s attention and request answers before you agree to move forward.
  3. Get information in writing: Getting all information in writing, especially information about any areas in which you are concerned, can help you better assess the investments offered to you and enable you to do it at your own pace, outside of the meeting.

By taking these steps to identify and address material conflicts of interest, you can better understand the investment products available to you and ensure that your registered adviser continues to offer you the investment products best aligned to your needs and suitability.