In a release on Monday, March 2, 2020, the British Columbia Securities Commission warned British Columbians not to fall into the “trust trap” – a questionable investment tip from friends or family. (PxHere photo)

In a release on Monday, March 2, 2020, the British Columbia Securities Commission warned British Columbians not to fall into the “trust trap” – a questionable investment tip from friends or family. (PxHere photo)

Investor alert: Nearly half of B.C. young adults susceptible to the ‘trust trap’

British Columbia Securities Commission says ‘trust traps’ are questionable tips from friends or family

How would you react to an investment opportunity that guarantees a monthly return of up to 15 per cent and has no risk? What about if the offer came from a friend or family member, or from someone at a social event?

To mark Fraud Prevention Month, the independent provincial government agency responsible for regulating capital markets commissioned a survey to ask these questions of more than 800 British Columbians and measure how susceptible they were to the “trust trap” – a questionable investment tip from friends or family.

According to the results of the British Columbia Securities Commission (BCSC) survey, which was conducted by the Innovative Research Group between Feb. 6 and Feb. 10, close to one-third (29 per cent) of respondents said the dubious investment opportunity in question was “worth looking into,” compared to 20 per cent who said it was worth looking into if the offer came from someone at a social event.

ALSO READ: Investor alert — ‘Split games’ pyramid scheme circulating in B.C.

The most vulnerability was found among 18- to 34-year-olds, the online survey found. Nearly half (47 per cent) of them would consider such an offer from a friend or relative.

People who are 35- to 54-years-old were found to be twice as likely to consider such a dodgy investment offer if it came from friends or relatives, and overall, women seemed more susceptible than men. According to the survey results, the percentage of women intrigued by such an offer was 13 points higher when it came from a friend or relative. Comparatively, the source of the offer seemed to make less of difference for men, for whom the gap was only six points.

“Fraudsters exploit the trust and friendship that exists in tight-knit groups,” said BCSC director of enforcement Doug Muir in the release. “Investors need to do their own research before making an investment, and shouldn’t just rely on advice from their friends, family or co-workers.”

ALSO READ: Former Abbotsford man pleads guilty to violating B.C. Securities Act

People 55 years old or older were the most skeptical in such situations, the survey found, with only 12 per cent being willing to consider such an investment offer from a friend or relative.

ALSO READ: Mission man raised more than $450K while pretending to be licensed day-trader — BCSC

Anyone who has a concern about investment fraud can contact the BCSC Inquiries line at 604-899-6854 or 1-800-373-6393, or to file a complaint online.



karissa.gall@blackpress.ca

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