In 2017, Canadians lost more than $95 million to financial scams1. Every year fraudsters become more clever and sophisticated—which means we have to become more careful and vigilant to protect our identities and assets. This article shares 8 frauds that Canadians are currently falling prey to—and tips on how to protect yourself from each.
1. Classic Credit Card Fraud with...a Twist
Instead of making lavish purchases like buying cars or 4K TVs, the latest trend has thieves making smaller, easily overlooked purchases, such as groceries, gas, and even monthly payments. One of our colleagues overlooked 6 months of fake Netflix charges because she subscribed to Netflix—but not with that credit card. Many Canadians don't review their credit card statements carefully and may miss these seemingly innocuous purchases.
- Download a smart phone app that notifies you anytime a purchase is made from your account.
- Keep an eye out for suspicious $1 purchases; fraudsters often make a small purchase as a test to ensure they have a valid card—then come the larger amounts.
2. The CRA Call
If you receive a call from the Canada Revenue Agency (CRA), claiming you owe money and that they need to verify your personal information, it might be a scam. A fraudster calls their victim claiming to be an agent of the CRA. They attempt to frighten their victim by notifying them that a significant amount of tax debt is owed, and if left unpaid, will result in the seizure of the victim’s assets. The scammer then asks their victim for their personal information, including information such as their health card or passport number and even their credit card number in order to reestablish their victims ‘good standing’ with the CRA.
- If the CRA does need to contact you by telephone, there are established processes in place to ensure your personal information is protected. If you want to confirm the authenticity of a CRA telephone call, you can do so by calling the CRA back using the phone number on their website to ensure you are really speaking with a CRA agent.
Also known as "The Grandparent Scam", it usually begins with somebody claiming to be a relative of their victim (often a grandchild), calling to ask for money due to an emergency situation while travelling. The fraudster requests a wire transfer of funds, allowing them to remain anonymous during the entire process.
- Ask the caller to call again in 10 minutes. Use that time to find out if this relative is actually travelling—or at home safe and sound.
- In some cases, fraudsters have performed research (using social media) to confirm that the individual is abroad. To be absolutely sure if it is indeed your relative, ask a few questions that only your real relative would know the answer to. If they avoid the question or can’t answer it, do not send money.
- This is one of the more serious financial scams that have affected Canadians. Victims of identity theft can spend years trying to get their finances and lives back in order. A fraudster will obtain your personal identification documents, such as a driver's license or SIN number, and apply for credit in your name. Identity theft can occasionally be a gateway for other serious crimes such as real estate fraud.
- Vigilance is key: always keep personal documents in a secure place and shred papers containing personal information before throwing it out.
- Consider installing a locking mailbox—your mail is a great source of personal information for thieves.
- If you receive a notification that a credit card application (that you never filled out) has been accepted or declined, call your bank and credit reporting agency (e.g., Equifax or TransUnion) immediately.
A fraudster using this technique typically targets higher net worth individuals—like dentists—who own valuable property and those who have paid off their mortgage. Real estate fraud almost always occurs in conjunction with identity theft. Using a stolen identity, a thief will attempt to forge documents to transfer a homeowner’s title to himself without the true homeowner’s knowledge. This scam puts your greatest financial asset at stake: your home.
- The best way to prevent real estate fraud is to safeguard any sensitive personal information. Identity theft often precedes real estate fraud, so the same precautions are required.
- Consider purchasing title insurance, which protects against liens on the property and title fraud.
Have you ever received an email offering you a large sum of money from a relative you’ve never heard of? Phishing scams can come in many forms. Fraudsters use a variety of clever and seemingly legitimate messages, including, “Your account has been hacked - sign in to restore access,” “You’ve won tickets to the Super Bowl - open to claim your prize,” or “You have a new message in your bank inbox.” After you’ve clicked the link, a fraudster will use any information you’ve entered to gain access to your personal information or finances.
- If you receive an email from someone you don’t know, that is making you an offer that is too good to be true, or that is intimidating or encouraging you to take immediate action, it is likely a phishing email. Don’t provide any information, click on any links or open any attachments found in the email. Just delete it.
- Social media is another common origin for phishing scams. Be cautious of any suspicious messages or links that are shared with you, even if the message comes from someone you know. If it seems out of character, it’s likely a scam.
- Beware of seemingly innocuous social media quizzes like, “Answer these 10 questions so your friends can get to know you better,” or “What Harry Potter character are you?” These are often used to get more information about you so fraudsters can guess your passwords to access your accounts.
This kind of phishing gets a little more personal! Catphishing is when a fraudster fabricates an online identity to trick someone into giving them money. It’s a long con, and the fraudster takes time (sometimes months) to convince the victim they are romantically interested. It’s especially common on dating websites, but can strike in many forms, such as social media, or even a prospective overseas business deal. They convince their victims to send money, usually in small amounts at first, for plane tickets, or to pay their tax bill. It can ultimately lead to theft, extortion, and occasionally the victim being tricked into committing a crime on the fraudster’s behalf.
- Be very wary of any contact with unknown individuals online.
- Do not send money to someone you have not met or don’t know well.
- Be wary of individuals who express a strong romantic interest online right away, but continually postpone meeting in person or don’t want to chat on the phone.
- Do not sign anything without a lawyer’s guidance.
- Do not accept money from anyone you don’t know–you may be aiding money laundering.
Widespread media coverage, combined with a relatively low understanding of cryptocurrencies, gives fraudsters ample opportunities to scam investors. There are a variety of possible traps, including:
- Shady or insecure exchanges—there are dozens of cryptocurrency exchanges, but very few of them are reliable; some have disappeared overnight, taking everyone’s money with them.
- Pyramid or “Ponzi” schemes.
- Fake exchanges or non-existent coins.
- Become educated about cryptocurrency before you dive in so you are less susceptible to scams targeting new investors.
- Research the exchange and make sure reputable experts are associated with it. Read reviews.
- Beware of “ICOs”, or Initial Coin Offerings, as they are not regulated by any financial authority.
- Visit TBACoin.ca, created by the Ontario Securities Commission to show investors potential red flags in cryptocurrency opportunities (just click on any link in the site for more information).
Remaining vigilant and knowledgeable about financial scams is the best way to protect yourself and your financial assets from potential fraudsters. Always follow your gut. If something seems suspicious, it usually is.
Know of any other scams currently targeting Canadians? Share them with us for consideration in future articles. Email us at email@example.com.
Your finances aren’t the only thing crooks are after--your practice and your patient data is always at risk of cyber-attacks. Learn these 6 key steps to reduce your risk of an attack.
1 Over $95M lost because of scams in 2017: Better Business Bureau, Global News, Feb. 2018