The Learning Centre:
Protecting your money 101: financial scams
What do the holiday season, March Break and the summer months all have in common?
These are all times of the year when you are most vulnerable to financial scams.
That’s because during these periods, the frequency of your online purchases tends to increase. However, the convenience of doing everything online could cost you 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 Better Business Bureau, Canadians lost more than $95 million to scammers in 2017.
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, British Columbia. However, back in 2013, she fell victim to a sophisticated scam that drained her pension income and retirement savings. With each passing year, these types of scams are unfortunately becoming increasingly more advanced.
Based on money that was defrauded from Canadians in 2017, here are the top 10 scams to be aware of:
- Wire fraud/spear phishing — this is where imposters, posing as CEOs, redirect company money through wire and email transfers (over $20 million loss reported)
- Online dating scams (over $19 million loss reported)
- Online purchase scams (over $13 million loss reported)
- Employment scams (over $5 million loss reported)
- Canada Revenue Agency/income tax scam (over $5 million loss reported)
- Shady contractors (over $3 million loss reported)
- Cryptocurrency scams (over $1.7 million loss reported)
- Advance fee loans (over $1.5 million loss reported)
- Fake invoices (exact amount unknown – estimated in millions)
- Fake online endorsements (exact amount unknown – estimated in tens of millions)
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.
With the Canada Revenue Agency (CRA) scam for example, victims were sent emails where the subject line read, ‘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 they supposedly owed the government. The resulting page included intimidating verbiage to coax victims to make immediate payment 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
Things to look out for in order 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 insignias)
- 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 slightly altered)
- Never click on a link included in a suspicious email (if you inadvertently do click, never enter any personal information on the webpage—instead, close the page immediately)
- If you’re travelling and using free local Wi-Fi, be sure to use only secure websites and 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 (i.e. receipts, emails and/or text messages)
- 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
- Contact the Canadian Anti-Fraud Centre
- Report the fraud to your financial institution
- If the fraud took place through social media, online purchasing, or dating site, be sure to report the incident directly to the website in question
- Also 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 higher financial education 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.
The information provided is general in nature and is provided with the understanding that it may not be relied upon as, nor considered to be, the rendering of tax, legal, accounting or professional advice. Please ensure to consult your accountant and/or legal advisor for specific advice related to your circumstances. Educators Financial Group will not be held responsible or liable for any losses, costs, damages or expenses incurred by reason of reliance as a result of the aforementioned information. The information presented was obtained from sources that are believed to be reliable. However, Educators Financial Group cannot guarantee their completeness or accuracy.