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Header Common financial scams and advice on how to avoid them
• Mar. 20, 2024

Every day thousands of Canadians are targeted by fraudsters looking to steal their personal information and scam them out of their hard-earned money.

Indeed, in 2023, the Canadian Anti-Fraud Centre (CAFC) processed more than 62,000 reports of fraud committed against more than 41,000 individuals. What's more, those reports accounted for more than $554-million in losses for Canadians, which was even more than the $531-million Canadians lost to fraudsters in 2022.

The reality is, those numbers are likely just the tip of the iceberg, as many types of financial scams and frauds go unreported. A recent survey conducted on behalf of TD* found that 43% of young adult respondents said they would be too embarrassed to tell anyone if they were a victim of fraud or a scam.

Financial scams and frauds can come in a variety of forms. Sometimes they arrive in the form of a text message, email, or phone call. Oftentimes, fraudsters are looking to impersonate someone to gain your trust, whether that be a prospective employer, a romantic partner, or even an official from a financial institution or government agency.

Ultimately, the goal of many financial scams is to either steal the victim's personal or banking information in order to gain access to their accounts, or to get the victim to wire money or purchase cryptocurrency or gift cards and send the funds to the fraudster.

In an effort to help you avoid becoming a victim of financial fraud, we've put together a list of some commons scams and how to spot them. For more information on prevailing frauds and scams targeting Canadians, please visit the CAFC website.

The 'Bank Investigator' Scam

One of the more common scams targeting Canadians involves fraudsters impersonating a bank official or law enforcement officer and convincing the victim they are helping with a bank investigation.

The details of the bank investigator scam can take many forms, but usually the goal of the fraudster is to get the victim to wire money, or purchase gift cards and send the funds to the fraudster. One particularly deceptive variation of this scam involves fraudsters convincing victims that they are assisting law enforcement in a fraud investigation.

Typically, the scam takes place when the victim receives a phone call from a fraudster posing as an employee of the fraud department at a bank. When impersonating a bank employee, the fraudster's goal is often to convince the victim to disclose their banking information and then use that information to remotely gain access to the victim's bank accounts.

The fraudster provides their name and a phony employee number and tells the victim either that their accounts have been compromised or that the bank is investigating a series of fraud cases that have been committed by staff at the individual’s branch – sometimes even providing actual names of staff members at a branch.

How to spot:

  • Start by knowing that your financial institution would never ask you to withdraw money or perform any financial transaction to help in a fraud or internal investigation of any kind.
  • Your financial institution will also never ask you for your banking credentials such as your online banking password or the one-time security code that is sent to your mobile device or email address. If someone is asking for these details, hang up immediately.
  • Don't trust any unsolicited calls you receive, especially if they're asking for personal information, and verify the source of anyone who claims to be calling from your bank.
  • Under no circumstances would your bank ask you for remote access to your device. If you receive a call from someone who says they are from your bank and they need you to download software onto your computer, hang up the phone and contact your bank immediately – using a phone number you know is legitimate (like on the back of your debit or credit card).

The Canada Revenue Agency (CRA) Scam

Have you ever received a call purporting to be from the Canada Revenue Agency (CRA), alerting you that you have unpaid taxes that need to be paid immediately, or you will be arrested? Or maybe you've been sent a text message pretending to be from the CRA that also contained a link where it said you could claim additional rebates or refunds? These are examples of CRA scams.

While Canadians can expect to be targets of the CRA scams anytime, the CAFC says many of these tactics tend to increase in popularity during tax season.

A common form of the CRA scam typically takes place when you receive a fraudulent text message or email that claims to be from the CRA. It requests that you reply or click on a link. You may then be asked to complete an application form by an urgent deadline in order to receive your tax refund or credit. Once you enter your personal information, the fraudster could use this data to steal your identity or access your bank accounts.

Another version of this scam sees the fraudster say to you that you owe the government unpaid taxes and, if you don't pay up immediately, you will be arrested by the police. They may ask you to confirm your social insurance number and then demand payment, which can include a request for cryptocurrency or gift cards.

As in many other frauds, the perpetrators typically use urgency and threats to try and trick their targets into sending money. In some cases, the fraudster may even suggest that the police are already en route to arrest the victim.

How to spot:

  • First, it's important to know that while there are legitimate reasons that the CRA may contact taxpayers by phone, email or mail, the CRA will not ask you by text message or email for any personal information, bank information, or to make payments by e-transfers, gift cards or cryptocurrency.
  • Always be wary. Any caller who is asking for your personal information over the phone, or is demanding action in a very short timeframe, should make you suspicious, and is likely fraudulent.
  • The CRA has published tips to help Canadians understand how to verify the authenticity of their calls.

The Job Scam

These types of scams typically target people who are looking for employment. One version of this scam involves a fraudster posing as an employer who makes fraudulent offers of employment to unsuspecting victims. In these instances, fraudsters may advertise fake jobs on legitimate job search websites, in classified ads, or through direct email or texts.

Once the fraudsters have offered their target victim a job, the fraudster (i.e. the "employer") convinces the victim to send them funds. The fraudster will often claim that these funds are either for training, uniforms or supplies for the job – none of which is true.

Another tactic fraudsters may use (once the victim has agreed to the job) is to send the victim a counterfeit cheque or email money transfer with a convincing story about why they need them to cash the funds and send back some of the money. In this scenario, the fraudster is essentially using the victim to commit fraud on their behalf by having the victim deposit a counterfeit cheque to the victim's deposit account after which the victim withdraws their own money and then sends some of it to the fraudster.

How to spot:

  • Remember that most legitimate employers will conduct an interview either in-person or by video chat before hiring you. If you're offered a job over email or text without ever meeting someone, that's a reason to be suspicious.
  • If you're worried the company you're talking to may not be legitimate, try searching for that company online and see if you can find any online reports of scams relating to the type of job you've been offered, or the company they say they're calling from.
  • Be wary of any job that promises "easy money" for little work. Other red flags may include poorly written or vague job descriptions.
  • Don't send money. A legitimate employer won't charge you to apply for a job or for job training and won't ask you to send them money directly or through a third party.

Romance Scams

Typically, a romance scam involves a fraudster posing as a potential love interest for the victim, who then uses the online "relationship" they have created to take advantage of the victim to defraud them of their money or steal their identity. These relationships are built over phone, email, social media message and/or text messages, by sending photos and gifts, and by going to great lengths to earn their target's trust.

Depending on the nature of the scam, and the potential financial payoff, romance scammers may spend weeks, months or even years building a relationship with their victims. The CAFC says that eventually, the scammer may urgently ask their victim for money, saying it's for something like emergency medical care. Seniors are often the target of sophisticated online scammers, according to the Government of Canada, but anyone can become the target of a romance scam.

How to spot:

  • Be wary if someone professes their love very quickly and/or consistently avoids any opportunity to meet in-person. In these cases, you should be extremely cautious.
  • Be cautious of anyone who asks for your personal information or money.
  • Be on the lookout for typical cover stories, where the fraudster may claim to be engineers or military personnel stationed overseas, to have lost a spouse and/or have a young child.

If you're worried you may have fallen victim to a financial scam

Report it - If you believe you've been a victim of to one of these scams, or any other kind of financial fraud, the Royal Canadian Mounted Police recommends you contact your local police department and file a police report. You should also contact your financial institution as soon as possible. It may also be a good idea to file a report with the Canadian Anti-Fraud Centre to help others.

Learn more and help others – The CAFC has compiled lists of some of the most prevalent scams currently employed across Canada to help you learn more.

Talk about it – While it's understandable that you may feel embarrassed, you are definitely not the first person who's been tricked by a financial scam. But sharing your story may help others avoid being scammed.

* The TD Fraud Prevention Month Survey was conducted by Maru Public Opinion on behalf of the TD Bank Group and undertaken between January 30 – February 4, 2024 by the sample and data management experts at Maru/Blue. The survey ran among 1,085 randomly selected Canadians aged 18+, all who are Maru Voice Canada online panelists. For comparison purposes, a probability sample of 1,085 has an estimated margin of error (which measures sampling variability) of ± 3.1%, 19 times out of 20.

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