Protecting yourself from fraud and scams

Each year, thousands of Canadians fall victim to fraud, scams and identity theft. Anyone can be a target.

You can protect yourself by being informed. Knowing the red flags can help you spot fraudulent activity sooner and take action.

Fraud and scams 101

Here’s a quick summary of what you’ll be learning:

Recognizing scams and fraud

Here are some important considerations to prevent scams and fraud:

Identity theft

Identity theft happens when someone steals your personal information, such as your Social Insurance Number (SIN) or credit card number, to commit a crime like fraud or theft.

Signs that someone may be trying to steal your identity

  • Your bank statement or online activity shows transactions that you don’t recognize
  • A creditor informs you that they’ve received an application for credit with your name and address even though you didn’t apply for one
  • A collection agency contacts you about a defaulted account that you never set up

What can you do if you think you’re a victim of identity theft? Find out nowOpens in new window.

Phishing, vishing and smishing

Phishing is an online scam where fraudsters will post a fraudulent website to gather your personal information for the purpose of fraud or identity theft.

Vishing happens when fraudsters call to trick people into providing their personal or financial information.

Smishing is a variation of phishing. It happens when fraudsters send a text with a link to a fraudulent website to gather your personal information for the purpose of fraud or theft.

What can you do to prevent phishing, vishing and smishing attacks? Find out nowOpens in new window.

Credit and debit card fraud

This type of fraud happens when someone uses your credit or debit card to make a purchase without your knowledge or consent. They could also apply for credit using your identity.

How does credit and debit card fraud happen?

Credit card fraud happens when a fraudster steals your card or gets their hands on your credit card number, often by phishing, vishing, smishing or malware. Fraudsters can also produce counterfeit cards or get credit cards by using your identity to complete an application.

What can you do if you think you’re the victim of credit card fraud? Find out nowOpens in new window.

Debit card fraud happens when a person steals your debit card information and Personal Identification Number (PIN). PINs can be obtained by “skimming,” using a tampered ATM or by switching out the debit handset (where you input the PIN).

What can you do if you think you’re a victim of debit card fraud? Find out nowOpens in new window.

Watch out for these scams

Here are the most common scams that you should know about before you send money via MoneyGram, money order, or a prepaid credit or gift card through Canada Post.

Note: This is not a comprehensive list of all the scams affecting Canadians. New scams appear all the time. The Canadian Anti-Fraud Centre provides a more detailed list. Read it nowOpens in new window.

Sweepstakes or lottery scams

If you receive a notification that you’ve won a lottery or sweepstakes, never respond by sending money. A legitimate lottery would never require you to send money before you can claim your prize.

Tips to protect yourself

  • Never send money or pay fees if you’ve been notified that you’ve won something
  • Consult a professional about any large winning notification

Romance scams

These scams involve dating and romance websites where the scammer sends emails with talk of need, love and/or desire.

Tips to protect yourself

  • Use reputable dating websites
  • Never send money, credit card or online account details to anyone you don’t know or trust

Government scams

Typically a telephone scam, callers may claim to be government officials and make threats of arrest, deportation or loss of citizenship if you don’t send payment immediately. Remember, the government never contacts people by phone for payment and officials don’t threaten people over the phone.

Tips to protect yourself

  • Never send money to someone calling claiming they are from the government
  • Do not trust your caller ID display – contact the applicable government department and confirm information regarding your profile

Loan scams

This scam involves telephone offers of low interest loans that are only available if you send money in advance.

Tips to protect yourself

  • Never send money to anyone requesting an upfront fee on a loan
  • Verify the legitimacy of the loan offer with authorities or a financial professional

Emergency scams

This scam typically targets grandparents. A caller claims their grandchild is in trouble and needs money because they’ve been involved in an accident or are stranded in a foreign country.

Tips to protect yourself

  • Never send money to anyone you don’t know or trust
  • Verify the story with family members or trusted authorities
  • Ask the caller questions only your grandchild could answer

Online purchase scams

There are two types of fraud related to online purchases.

In the first, an online fraudster may contact you claiming that the winner of an auction you were bidding in has pulled out and is now offering the item to you. In the second type, fraudsters may trick consumers into buying counterfeit goods at discounted prices through spoofed websites.

Tips to protect yourself

  • Never buy from sellers with poor ratings – only make purchases through a reputable website and/or company
  • Be informed about an online seller’s refund policies and dispute-handling processes, and be careful that you are not overcharged
  • Be wary of sellers who ask you to send funds internationally or via a money transfer

Money transfer scams

In this scam, you’re requested to transfer money for another party. The scammer may offer a share of the money if you provide bank account details and pay taxes and fees for the transfer. The scammer may claim to be a lawyer or bank representative advising you a long-lost relative has left you an inheritance.

Tips to protect yourself

  • Never send money or provide credit card or banking information to anyone you don’t know or trust
  • Verify the story with loved ones or trusted authorities

Source: Detecting and protecting yourself from fraud, Canada Post and MoneyGram

4 quick tips to remember

When it comes to fraud, you are the first line of defence. Here are 4 quick tips to help you become scam smart:

  1. Never give out your SIN, except to:
    • Your employer after you’ve been hired
    • Government-operated programs, such as Employment Insurance, Canada Student Loan and Canada Pension Plan
    • Canada Revenue Agency (for income tax purposes)
    • Credible financial institutions
  2. Remember, a financial or government institution will never ask for personal or financial information via email
  3. Monitor your purchases on a regular basis as thieves may make smaller purchases that may go unnoticed – thieves don’t always make large purchases with stolen information
  4. Consider setting up any electronic alerts from your financial institution to notify you of suspicious activities

Source: Chartered Professional Accountants of Canada, Fraud Protection (PDF)Opens in new window.

How to report fraud and scams

The Competition Bureau provides a step-by-step guide on what to do if you think you’ve been a victim fraud, scam or identity theft. Learn what to doOpens in new window.

This material has been prepared for informational purposes only and is not intended to be a substitute for obtaining advice from a financial professional.

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