Investment fraud in Canada: red flags and where to report

Updated November 2026

Investment fraud causes the largest reported losses of any type of fraud in Canada. Most schemes share the same few warning signs, and one five-minute check – is this person registered? – stops most of them.

The classic red flags

Stop if you see any of these:

  • Guaranteed or "risk-free" high returns. Real investments that pay more carry more risk. Steady 2% a week or 30% a year with no losses is a sign of fraud, not skill.
  • Pressure and urgency. "Only three spots left", "the price goes up tomorrow", "don't tell your bank".
  • An unregistered seller. Anyone selling investments or giving advice in Canada generally has to be registered.
  • Payment by crypto, gift cards, wire transfer to a personal account, or to a "wallet" you are told to open.
  • Secrecy or complexity – a strategy no one will explain, or you are told not to discuss it with family or your advisor.
  • Contact that moves from social media to WhatsApp, Telegram or another chat app.

Crypto and "AI trading" schemes

Many current scams promise that a trading bot or "artificial intelligence" platform will make money for you automatically. Securities regulators have issued alerts about unregistered platforms using AI branding. Common pattern: you open an account on a slick website, send a small amount, see a fake dashboard showing big profits, are encouraged to send more – and then can't withdraw, or are told to pay "taxes" or "fees" first. Crypto payments are usually irreversible once sent.

Fake celebrity endorsements and deepfakes

Fraudsters create fake news articles and ads showing well-known business people, politicians or news anchors "endorsing" an investment. With AI, the video and voice can look and sound real. The Canadian Anti-Fraud Centre's advice: assume any video of a public figure promoting an investment is fake until you have verified it yourself. The same goes for "investment experts" in online groups, and even video calls – images, voices and video meetings can be manipulated.

Romance scams often end the same way: someone you met online slowly turns the conversation to a "sure" crypto opportunity.

Recovery-room scams

After you lose money, you may be contacted by someone claiming to be a lawyer, police officer, regulator, government agency – or even the Canadian Anti-Fraud Centre – offering to get your money back for an upfront fee. This is a second scam. In the first half of 2026 alone, Canadians reported about $13.7 million lost to recovery fraud. Never pay upfront to recover money lost to fraud.

RRSP "strip" and tax-free withdrawal schemes

The Canada Revenue Agency warns about promoters who offer to get money out of your RRSP or RRIF – sometimes even a locked-in plan – without paying tax. Typically you are told to move your RRSP to a self-directed plan with a specific trustee and buy a particular investment (shares, a mortgage, co-op units) that then sends cash back to you through a "loan", an offshore account or a debit card, minus a large fee.

In one CRA case study, clients received about 70% of their RRSP value while the promoters kept 30% in fees and commissions. The clients then had to pay the tax they should have paid on the withdrawal, plus interest and penalties. Warning signs the CRA lists include promises of tax-free access to RRSP funds, quick access to locked-in money, tax receipts worth three or more times what you contributed, and unrealistic returns. An offer of a tax-free RRSP withdrawal means you need a second opinion. See Common mistakes for legitimate RRSP withdrawal rules.

Check before you invest

  1. Check registration on the CSA's National Registration Search (aretheyregistered.ca), CIRO's AdvisorReport, or the AMF registers in Quebec. Confirm the website and phone number match the registered firm – fraudsters copy real firms' names.
  2. Search investor alerts on the CSA website and your provincial regulator's site.
  3. Talk to someone you trust who isn't involved. Fraudsters rely on isolation.
  4. Name a trusted contact person with your investment firm, whom the firm can call if it suspects financial exploitation.

Where to report

If you have already paid

  1. Stop sending money, whatever you are told about fees, taxes or "unlocking" your account.
  2. Call your bank or card issuer immediately; some transfers can be stopped or reversed if you act fast.
  3. Change passwords, turn on two-step verification, and remove any remote-access software the scammer had you install. Never share verification codes.
  4. Save evidence: messages, website addresses, wallet addresses, receipts and screenshots.
  5. Report to the CAFC and police as above.
  6. Watch for follow-up "recovery" offers – they are part of the same fraud.

Sources