How to Avoid a Financial Scam

Fraudsters are everywhere these days. Here’s how to protect your identity and your money.

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Ever heard of pop-up fraud? Jasper Smith, who runs fraud investigation company Due Diligence Canada in Vancouver, had a client taken in.

The seventy-something client had just changed Internet service providers, so when a computer pop-up offered a survey on the new service and promised a free watch – he just had to pay the postage – he went for it.

He typed in his address and credit card information, and the watch soon arrived. It broke immediately, and he discovered later he’d been charged an additional US$100 on his credit card.

‘’It’s become an epidemic of fraud. Every time you’re online you’re bombarded by fraudsters.”

He hired Smith, who discovered his client had agreed to a monthly subscription by clicking “Agree” on a page where the fine print required endless scrolling to see. Various offices and call centres were involved in the transaction, making it difficult to pinpoint who was responsible. “How many thousands of people are paying something like this on their credit card every month and not knowing it?” says Smith. “They won’t ever get shut down, it’s such a fine line on a fraud.”

These types of scams bilked Canadians out of more than $290 million between 2014 and 2016 alone, according to the Canadian Anti-Fraud Centre. In a 2018 survey by CPA Canada, 35 percent of Canadians said they’d been a victim of financial fraud at some point in their lives.

‘‘It’s become an epidemic,” says Smith. “Every time you’re online, you’re bombarded by fraudsters.”

What fraud looks like

Today’s rip-offs are numerous and varied. Many people have received calls from the “Canada Revenue Agency” threatening jail if they don’t pay a fee now. E-mails that look like they’re from close friends in a bind ask you to send money. Scams even come in via text. What’s the end game? Criminals want to score a little money, or they might empty your bank account, says Smith. They may even seek personal information and steal your identity, and do things like take out loans in your name.

Who’s susceptible?

“Everyone is at risk of becoming a victim of fraud,” says Lisanne Roy Beauchamp, a representative with the Canadian Anti-Fraud Centre. “Most people don’t think it could ever happen to them, but fraudsters are using increasingly sophisticated methods to target consumers of all ages and from all walks of life.”

Younger people are getting scammed, mainly because they’re doing riskier things online. Seniors get manipulated because they’re less comfortable with technology. But it’s also about timing. “In moments where you’re not really thinking or you’re distracted, if something looks real, you can be taken in very easily,” says Smith, who found himself, in early 2018, pondering a Canada Revenue Agency e-mail regarding an error on his 2017 tax return — until he realized he hadn’t filed yet.

Stay alert

The only way to protect yourself is to be wary of every communication you receive. “Don’t believe anything you read on the Internet. Even your friends’ e-mails can be compromised,” says Smith.

Double-check everything. Text your friend. Call the company, bank or government agency that’s asking you for a new password or to confirm your identity. Look closely at the wording of e-mails and scrutinize the return address. Never click on links or directly reply to a suspicious e-mail or text.

Use the Internet to find the correct phone number for CRA or Microsoft. Google the wording of e-mails or phone calls; if it’s a scam, others will have reported it. (Google “Microsoft scam” and you get hundreds of thousands of results, including articles from Microsoft itself about avoiding tech-support scams.)

Oddly, the best thing to do in the event of a possible scam is nothing. “They’re preying on an individual’s fear,” says Smith.

Remember, no one gets arrested out of the blue, and no company will shut down your e-mail or bank account without fair warning. Roy Beauchamp says you’re most at risk when you’re having money problems or generally feeling vulnerable. No matter what’s going on in your life, remind yourself that you have rights as a consumer and citizen. Stay calm and confident to protect yourself and your money.

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