Protecting your money 101: financial scams

What do the holiday season, March Break, and the summer months all have in common?

These are specific times of the year when your vulnerability to financial scams increases. That’s because during these periods, the frequency of your online purchases also tends to increase.

That’s when the convenience of doing everything online could cost you more than you bargained for if you’re not careful.

From your credit card numbers and home address to your first and last name—you have most likely entered your personal information time and time again on countless websites. This digital trail provides scammers with more than enough breadcrumbs to leave you vulnerable to Internet fraud.

According to the Canadian Anti-Fraud Centre, Canadians lost over $577 million to fraud in 2023.

In another study conducted by CPA Canada, over 50% of Canadians reported having received fraudulent requests, and one in three noted they had fallen victim to one or more types of fraud at some point in their lives. Unfortunate proof that with each passing year, financial scams are becoming increasingly more advanced.

In 2024, the rise of generative AI has further complicated the landscape of financial fraud. Fraudsters are now using AI to create deepfake media, which can be used to bypass identity verification processes and perpetrate various types of fraud, including credit card fraud, loan fraud, and phishing scams.

Being an educator, you might be thinking that you’d be able to spot a scam from a mile away. After all, you’ve got education on your side, right?

Well so did a teacher in Victoria, BC, who fell victim to a sophisticated scam that drained her pension income and retirement savings.

The best way to protect yourself from falling victim to these types of scams is to always be cautious with your personal and financial information—and always be aware of the latest types of scams being perpetrated by fraudsters.

With that said, here are the top 10 scams to be aware of:

1. Identity fraud: This is where scammers use your personal information to apply for various accounts in your name such as credit cards, government benefits, cell phone services, or to even try and take over your social media and email accounts
2. Extortion: These scams tend to come in the form of emails or phone calls claiming you’re facing serious criminal charges unless you respond to their demands (which usually involves sending them an immediate payment to avoid prosecution or going to jail)
3. Personal information scams: Fraudsters will try to make you believe that your Social Insurance Number is linked to a fraudulent account or criminal activity (and that the only way to stop it is to verify your personal information or deposit money into a safe account—usually in the name of the ‘representative’, i.e., scammer)
4. Phishing: Scammers pretend to be from legitimate sources to convince individuals or businesses to send them money by leveraging existing relationships between the person receiving the email and the person sending it
5. Counterfeit merchandise: These scammers use websites that have the same look and feel as a legitimate merchandiser to sell big name products at massive discounts, however, the products are more often than not inferior copies and some could pose significant health risks (e.g., some counterfeit jackets have been found to contain bacteria, fungus, and mildew)
6. Service scams: This is where fraudsters try and sell you on a service for your home such as air duct cleaning, low-interest rate offers, or some type of tech support
7. Merchandise scams: Whereas counterfeit merchandise scams sell you inferior copies of products, merchandise scams sell you products you won’t actually receive, such as concert, sporting, and event tickets, puppies (and other types of pets), as well as apartment, cottage, or vacation rentals
8. Victim vendor and romance scams: If you place a legitimate ad online for personal or business purposes, there is a chance you may be contacted by a scammer claiming to be someone they’re not—in some cases, trying to gain your sympathy (to either avoid paying for something you’re selling or to get you to lend them money, which they have no intention in paying back)
9. Job/employment scams: Be weary of anybody calling or emailing you about a job opportunity without any type of official posting—especially if they’re asking for your financial and banking details up front
10. Investment scams: Any solicitation for investments into false or deceptive investment opportunities

The common element to look out for among all of these scams is any email or phone call that asks you to provide online passwords and/or banking information.

A few years back you might recall a Canada Revenue Agency scam, where victims were sent emails with the subject line ‘Tax Return File Overdue’ (alleging one or more of the user’s tax returns were overdue or incomplete). The email then instructed the victim to click on a link for detailed information about the amount of money supposedly owed to the government. The resulting page included intimidating verbiage to coax victims to make immediate payments to avoid any tax penalties by filling out their online banking information.

However, according to the CRA’s website, they will never:

• Ask you to provide your personal or financial information by email, text, or by clicking on a link
• Ask for information about your passport, health card, or driver’s license
• Send payments using Interact e-transfer (they only send payments by direct deposit or cheque)
• Request payments by gift cards or pre-paid credit cards

Here’s how to avoid falling victim to potential scams:

• Never be fooled by official names or logos — one of the most common ways these phishing scams will try to fool you is by using official company logos or insignia
• Pay close attention to the sender’s email address — in some cases, the email or web address may look close to the company’s name, but is actually slightly altered
• Never click on a link included in a suspicious email
• If you do inadvertently click, never enter any personal information on the web page—instead, close the page immediately
• If you’re ever using free local Wi-Fi, be sure to visit only secure websites and use encrypted passwords (and always clear your browser history afterwards)

If you find yourself on the receiving end of an online or telephone scam, immediately take the following steps:

• Collect as many details about the fraud as possible (e.g., receipts, emails and/or text messages, etc.)
  
• Report the fraud to your local police department and keep a log of dates/times of all your calls, as well as all file or occurrence numbers (according to the Better Business Bureau, less than 10% of scam victims actually report the crime)
• Contact the Canadian Anti-Fraud Centre
• Report the fraud to your financial institution
• If the fraud took place through social media, online purchasing, or a dating site, be sure to report the incident directly to the website in question
• Be sure to place flags on all your accounts and report the incident to both credit bureaus (Equifax and TransUnion)

Remember: increasing your financial literacy is your best defense against financial scams.

From understanding your credit report and credit score to knowing what mistakes to avoid, putting a little effort towards greater financial literacy can go a long way to ensure you make sound decisions where your money is concerned.

That’s where Educators Financial Group can help.

We’ve put together in-depth resources in The Learning Centre to boost your literacy on a wide range of financial topics that are important to you.

Start by reading 5 ways financial literacy impacts life beyond the classroom.

Sources:
https://www.antifraudcentre-centreantifraude.ca/index-eng.htm
https://www.newswire.ca/news-releases/fraudsters-targeted-almost-3-in-4-canadians-in-2020-cpa-canada-survey-reveals-843083984.html
https://www.antifraudcentre-centreantifraude.ca/features-vedette/2022/02/frauds-10-fraudes-eng.htm