Survey shows 1-in-3 Canadians get investment advice on social media regularly

A phone and representations of cryptocurrencies are seen in this file photo.

Roughly one-third of Canadians say they use social media to get investment information at least once a week, and nearly one-in-five have either purchased or considered purchasing an investment they learned about on social media, according to a new survey.

The online poll of a representative sample of the Canadian population was conducted by Innovative Research Group on behalf of the British Columbia Securities Commission, which says it is growing "increasingly concerned" about investment scams targeting people via social media and online dating sites.

“You should always be extremely careful about unsolicited offers to invest on social media,” said Doug Muir, the BCSC’s director of enforcement, in a news release announcing the results of the survey.

“Fraudsters are adjusting their methods to keep up with the digital world, but they’re using the same old ploys – playing on people's emotions and exploiting their fear of missing out on the opportunity of a lifetime.”

Among survey respondents who recalled seeing an advertisement for an investment product online, 55 per cent said the product being advertised was cryptocurrency-related.

Cryptocurrency was by far the most commonly advertised investment, far outpacing ads for cannabis companies, which were the next most common at 20 per cent.

Ads for non-fungible tokens (NFTs), which are based on the same blockchain technology that serves as the ledger for cryptocurrencies, were reported by 18 per cent of respondents.

Not all investment products advertised on social media are scams, but the BCSC says its survey highlights the sizable audience for social media investment advice, and thus the risks associated with social-media-based frauds.

Cryptocurrency, specifically, has been flagged by the RCMP as a common denominator in many scams reported to the Canadian Anti-Fraud Centre in recent years. 

For people who are doing investment research on social media, the BCSC has the following advice:

• Never invest based solely on the advice of someone you met through social media or a dating site. Make sure you know who you’re investing with.
• Don’t get caught up in the hype and rush in. Take your time and think about the investment, and whether you’re prepared to lose it all.
• Be skeptical about what you read on social media. Think about whether the investment is right for you and if it fits into your investment goals.
• Don’t buy if you don’t understand the investment, asset or risks involved. If you can’t understand it and can’t get your questions answered, walk away.
• Use a registered trading platform when buying crypto assets. Check the Canadian Securities Administrators’ National Registration Search to see if the entity is registered with securities regulators. 

The BCSC also recommends that anyone who suspects investment fraud report it as soon as possible. 

The BCSC survey was conducted in January and included 2,799 respondents, with a large oversample in B.C. The data was weighted to a sample size of 2,000 to be representative by age, gender, region, official language, education and personal finance characteristics. 

A detailed summary of the survey results is embedded below.