March is Fraud Prevention Month, and the Competition Bureau recently partnered with the Better Business Bureau and other fraud-prevention partners to compile a list of the top 10 financial scams in Canada during 2016.
The list is based off of the amount of complaints received regarding each type of scam. Though it may come as no surprise that fraud continues to be a source of stress for many Canadians, the list is just another reminder that Canadians need to think twice before giving out their personal information and their money. Fraud comes in many ways, shapes and forms, and you can easily become a victim if you don’t take the proper precautions.
1. Employment scam ($5.3 million lost)
If you receive notice that you have an interview for a job you didn’t apply for, it’s likely a scam. Do your research and never send a cheque or money transfer to the so-called “employer.”
2. Romance scam ($17 million lost)
Online dating may be the modern way to find love, but it’s also a popular way to scam. “Catfishing” or faking an identity to start phoney relationships, develop false trust, and trick people out of their money is more common than you think. Do not wire money to a stranger, and be vigilant about engaging with someone who is unavailable to meet in person.
3. Identity fraud ($11 million lost)
To prevent scammers from stealing your identity and taking out loans, credit cards or renting property in your name, do not carry your SIN around with you and change online passwords on a regular basis.
4. Advance fee loans ($1.1 million lost)
Do not pay an upfront fee for a loan. These types of scam deals are appealing to those who have a hard time qualifying for a reputable loan. But this is actually illegal in both Canada and the United States. Always borrow through an authorized lender.
5. Online purchase scams ($8.6 million lost)
Shop on reputable, legitimate websites to avoid getting scammed by websites that sell fake products or offer free trial traps. Google reviews on the website if you’re unsure, and use third party payment options like PayPal to lessen the chances of you being ripped off.
6. Wire fraud or “spearphishing” ($13 million lost)
Spearphishing occurs online when fake companies demand payment via wire transfer. Think before opening incoming emails and don’t click on any links from suspicious addresses – especially when the email requests funds.
7. Binary options scam ($7.5 million lost)
The promise of low risk and high returns should raise a red flag, but for many it’s too enticing to ignore. Always understand your investment risk before entering any agreement and seek investment advice from trustworthy professionals.
8. Fake lottery/contest winnings ($3 million lost)
Many Canadians receive calls and emails about fake winnings from imaginary lotteries in Canada or even abroad. If it seems too good to be true, it probably is. If you think the win is legitimate, contact the corporation directly, and don’t fork over cash to receive your winnings.
9. Canada revenue agency ($4.3 million lost)
At one point, this was the No. 1 most common scam. The organization typically only contacts Canadians by direct mail, so be cautious of any threatening call or email from the CRA demanding money. Log onto your CRA account for updates and to view important information.
10. Fake online endorsement and sponsored content (Amount lost unknown)
Many influencers are paid by companies to endorse a product on social media. Be aware of this when making purchase decisions; seek out additional reviews and visit BBB.org for legitimate product reviews.
The best way to prevent fraud is to stay informed. Always be cautious about where you send personal details and, of course, funds. An informed consumer is a protected consumer.