According to the Canadian Anti-Fraud Centre, the financial toll of fraud continues to rise, with the total reported loss from mass marketing fraud increasing from $66.8 million in 2011 to $76.1 million in 2012. Fraud loss from identity theft has also gone up from $13.2 million in 2011 to nearly $16 million in 2012. Canadians between the ages of 50 and 59 remain the biggest target and victims of fraud, based on data from last year.
We can all work together to bring down these troubling statistics. Based on the types of financial fraud most prevalent today, here are some tips that will help protect you, your family and your loved ones from being scammed.
Don’t pay to get paid
One ruse employed by fraudsters is asking their victims to, in effect, “pay to get paid.” There are several variations of this scam. It could be an e-mail from the fraudster promising a portion of an inheritance to the victim in return for their assistance in transferring the funds to an account where they can be accessed. Another common approach is through an advertised job opportunity (online or in print), or a phone call or e-mail telling the intended victim that they’ve won a prize, which they now need to claim. In all these scenarios, the victim is asked to first pay some money to the fraudster before they’re offered the job, receive their share of the inheritance, or before the prize is released. Once the fraudsters receive the money, they break off contact, leaving the victim with the loss.
Don’t pay back what you’re paid
This is another fraudsters’ favourite, targeting sellers on sites like craigslist. A seller is paid more than the asking price for advertised merchandise, using a fake cheque. The fraudster pretends the overpayment was a mistake and asks the seller to go ahead with the shipment, deposit the cheque and send back the extra funds. The seller later realizes that the cheque is fake. But by then it’s too late – the fraudster makes away with both the money and the merchandise.
Beware of being scammed by fake “family”
This is a trick that unfortunately targets many seniors, hence the name “Grandparent Scam.” The fraudster contacts the victim by phone or e-mail claiming to be a relative (usually a grandchild) faced with a financial need while travelling abroad. The pretend relative is usually in some kind of “trouble” – they have either been arrested, involved in an accident, or are in hospital or jail. The fraudster asks that funds be immediately sent to assist. The victim finds out later that their relative had nothing to do with this and that it was a hoax.
Don’t buy blind
Be extra careful when purchasing goods or services from a seller or business that you’re unfamiliar with. Every year, Canadians lose money to fraudsters who advertise great deals on products and services on the internet or in print. The ordered products either never arrive after payment, are of inferior quality or different from what was advertised.
This scam also includes the offer of a loan to individuals regardless of their credit history. When consumers respond to the ad, they are asked to pay an advance fee to process the loan but never receive it once the money is sent. One way to avoid being snared is to purchase from businesses registered with the Better Business Bureau, or ensure you have fully researched and are confident about the legitimacy of the business before dealing with them.
Don’t take the phish bait
“Phishing” is an appropriately-named scheme in which fraudsters go “fishing” for information from consumers and then use it to commit financial crimes. Phishing can lead to identity theft when fraudsters are able to collect enough personal financial information about an individual to impersonate them. Victims of identity theft may find out, for example, that a loan has been taken out in their name or the fraudster may make purchases using their financial information.
To avoid biting the phishing bait, never respond to e-mails or phone calls claiming to be from your financial institution where they ask you to provide or enter your banking information on a website. Instead, call your financial institution immediately to let them know. If you received an e-mail, delete it. Take note that phishing attempts can look and sound quite legitimate. Fraudsters may even create websites that replicate your financial institution’s. Phishers may also impersonate government agencies, charities, utility companies and other organizations you deal with. If in doubt, take the time to first call the company, using its known phone number, to verify that they have been trying to reach you.
In addition to the above tips, it’s a good idea to check your credit file regularly and to review your banking statements so that you don’t miss any fraudulent activity. Don’t expose your debit card PIN and don’t write it behind your card. And, before you dispose of any sensitive personal financial information, make sure it’s shredded so fraudsters are not able to access it.
For more information on how to prevent financial fraud, visit us at http://www.coastcapitalsavings.com/security_privacy
Kathy McGarrigle is chief operating officer for Coast Capital Savings.
