Fraud: What Canadians need to know – Part 1

Fraud is wrongful or criminal deception intended to result in financial or personal gain. Fraud has the potential to affect all Canadians, irrespective of age, gender, race, income level, or location.

According to The Little Black Book of Scams, there are 12 common types of fraud or scams, which we’ll be exploring in detail in our four-part Fraud series.

Today we cover the first three: subscription traps, identity theft and CEO scams.

Subscription traps

A subscription trap can trick you by offering “free” or “low-cost” trials of products and services. Common products we see in these traps are weight loss pills, health foods, pharmaceuticals, and anti-aging products. Once you provide your credit card information to cover shipping costs, you are unknowingly locked into a monthly subscription. Delivery and billing can then be difficult, if not almost impossible, to cancel.

Scammers use websites, emails, social media platforms and phones to reel people in. Remember, high-pressure sales tactics like a “limited time offer” are often used to rush you into making a decision.

Tips to protect yourself

• Trust your instincts. If it’s too good to be true, don’t sign up
• Before you sign up for a free trial, research the company and read reviews; especially the negative ones. The Better Business Bureau is a great source of information
• Don’t sign up if you can’t find or understand the terms and conditions. Pay special attention to pre-checked boxes, cancellation clauses, return policies, and any vague charges
• If you go ahead with a free trial, keep all documents, receipts, emails, and text messages
• Regularly check your credit card statements for frequent or unknown charges
• If you have trouble cancelling your subscription, contact your credit card provider, your local consumer protection organization, or law enforcement agencies

Identity theft

Scammers are always on the lookout to collect or reproduce your personal information to commit fraud. Thieves can make purchases using your accounts, obtain passports, receive government benefits, apply for loans, and more. The repercussions can turn your life upside down.

Fraudsters use techniques that range from unsophisticated to elaborate. Offline, they can go through trash bins or steal mail. Online, they can use spyware and viruses, as well as hacking and phishing.

They look for credit card information, bank account details, full name and signature, date of birth, social insurance number, full address, mother’s maiden name, online usernames and passwords, driver’s licence number, and passport number. Identity theft is a serious crime.

Tips to protect yourself

• Never provide your personal information over the phone, via text message, email or the internet
• Avoid public computers or Wi-Fi hotspots, such as coffee shops, to access or provide personal information because they can put you at risk
• Create strong and unique passwords for each of your online accounts. Password-protect your devices and home Wi-Fi network
• Use a secure and reputable payment service when buying online—look for a URL starting with “https” and a closed padlock symbol
• Avoid giving out personal information on social media, through posting, commenting, third-party quizzes and games, or even messages to family or friends (be wary of hacked or imposter accounts). This personal info can be used along with your pictures to commit fraud
• Always shield your PIN when using your card. If you hand your credit or debit card over to a cashier, never lose sight of it
• Shred and destroy documents with personal information

CEO scams

In a typical CEO scam, fraudsters will impersonate a senior company executive, either by gaining access to their email address or by imitating one. They will send realistic-looking emails that try to trick you into wiring money to a third party. The emails will make the request sound urgent and confidential. For example, they may say the money is needed to secure an important contract, complete a confidential transaction, or update a supplier’s payment information.

Fraudsters are usually strategic about the timing of these emails. They send them when executives are away or hard to reach. This lucrative scam can cost businesses tens of thousands to millions of dollars. CEO scams are a growing global threat that targets small local businesses and large corporations alike.

Tips to protect yourself

• Keep your computer systems secure with an up-to-date, reputable antivirus software, and strong passwords
• Validate all transfer requests either on the phone or in person. Never use the contact information provided in emails
• Verify the sender’s email address—scammers will often create addresses that are very similar to legitimate ones, with just one or two different letters
• Encourage your company to create a standard process for money transfers that requires multiple levels of approvals
• Limit the details you share publicly. Fraudsters use information that’s available online and on social media to find potential victims and to time their fraud

In our next instalment, we discuss three more popular scams, and how you can protect yourself. Stay safe!