How one Manitoban lost $500,000 in a brand-hijacking scheme.
We all know Little Red Riding Hood or some variation of her story, and we learn early on in our lives to watch out for a wolf in granny’s clothing. Unscrupulous individuals hiding their true intentions by disguising themselves as people we know and trust is a tale as old as time.
A new and dangerous form of this phenomenon today is brand hijacking, a technique that investment fraudsters are using to separate you from your money. Instead of a hungry beast dressed as a little old lady, it’s a sophisticated criminal pretending to be a a well-known financial organization or bank. And unlike a wolf wearing bifocals, it can be difficult to detect and is becoming an alarmingly common technique used by scammers.
“John’s Story” – He Lost His Whole Nest Egg
This week, one of the Manitoba Securities Commission’s investigators shared this story. We’ll call the victim “John”, to protect his privacy.
John had worked hard and saved a $500,000 retirement nest egg. He was looking for a safe investment and started to shop around for a Government of Canada Bond. He was approached by what he thought was a legitimate, well-known Canadian financial institution offering him a rate of 8-9% – much higher than the current posted rates (which, as of publication are in the range of 3-5%). John thought the 8-9% rate offered was a good deal. In the end, John unknowingly wired funds, which eventually ended up in an offshore account where he ultimately lost the entirety of his retirement savings.
Brand Hijacking Tricks of the Trade?
This scheme is a basic, but very difficult-to-spot trick. And the Manitoba Securities Commission considers it to be a dangerous form of fraud that is impacting Manitobans – beyond John – each and every day.
In John’s case of brand hijacking, the fraudster used:
- The financial institution’s name and logo
- The names of actual bank employees when communicating with the victim
- Falsified documents altered to look legitimate
- A replicated website that looked very similar to the website of the real bank.
Tips to protect yourself and loved ones from this and other fraud
- If you are contacted by someone claiming to be from a financial institution and are suspicious, hang up, and contact the financial institution directly.
- Never give your personal or financial information to people you don’t know, including account numbers, codes, passwords or PINs.
- If it’s too good to be true, it usually is.
A full list of the red flags of fraud are found on MoneySmartManitoba.ca
We need Manitobans to understand what brand hijacking is really all about—please share this with your friends and family. Manitobans losing their hard-earned money to fraud is a crime.
Founder and Project Coordinator, MoneySmart Manitoba
Manager, Education & Communications, Manitoba Financial Services Agency
Buy gold and silver from reputable companies, the Canadian mint has a list of dealers on their website mint.ca if you have a lot to invest they can help also some offer RRSP in silver and gold ….go figure!