With the popularity of online banking these days, e-Transfers have become one of the easiest and most convenient ways to pay or accept payment from someone. However, this recent technology boom has also allowed hackers, fraudsters, and identity thieves to develop new ways of stealing your money, particularly through e-Transfer scams.
In fact, there are multiple ways of falling victim to this type of cybercrime if you’re not careful when conducting bank transactions online. Ultimately, you should only send an e-Transfer to someone you know and trust and not a stranger. This is the easiest way to avoid getting scammed.
Key Points
- Sending and receiving money via the internet is convenient, but it’s not without its risks.
- Many scammers use e-Transfer scams to access other people’s money.
- Some common e-Transfer scams include intercepted transfers, frozen bank accounts, pet scams, job scams, and simply the buyer failing to send the funds.
Types Of E-Transfer Scams And How To Spot Them
There are a few different types of e-Transfer scams you may encounter when banking online, whether you’re sending money to someone or accepting payment from them. Here are some of the more common e-Transfer scams in Canada:
The Buyer/Seller Scam
Marketplace websites like Kijiji, Craigslist, and Facebook are becoming popular ways of purchasing or selling products and services online. Sadly, they’re also good hunting grounds for scam artists. The scam could happen in two ways:
- Frozen Bank Account — You agree to buy a product or service that the seller promises to deliver, only to find out that their bank account is frozen or fraudulent.
- Failure To Transfer The Funds — You sell something online or in person, the buyer says they’ll transfer your money once they receive the product/service, but you never receive the funds.
When either of these scams happens, the result is more or less the same. Your money is stolen and you receive nothing or the bank takes your e-Transfer funds back, leading to the loss of your item/service without payment. The bank may even accuse you of trying to scam someone, leading to a blocked account for several weeks.
Warning Signs
Some key red flags of this scam are as follows:
- The “buyer” says they’ll send the transfer after you give them the product/service
- The “seller” asks for payment before they deliver the product/service
- The “buyer” or “seller” is rude, demanding, or unresponsive
- They agree to buy or sell something quickly, with no questions asked or answered (i.e. the deal is too good to be true)
The Intercepted E-Transfer Scam
One of the most devastating and hard-to-spot scams is when your e-Transfer gets intercepted by a hacker, malware, or spyware on the desktop or mobile device that you use to access your email or online banking. It can be easy for a hacker to break into and monitor these kinds of accounts, and then find out your banking details, passwords, and other financial information.
Afterward, you merely need to get or send an email or text with a link to you or the recipient’s bank account, which is standard for e-Transfers. The scammer can then see or guess the security answer that gets typed in, especially if it’s an easy one, like your name or street. The transfer is then redirected to another account and all you receive is a notification telling you it’s been accepted.
Warning Signs
Potential warning signs of this type of scam include the following:
- You or your recipient don’t receive the transfer almost immediately
- Your recipient can’t collect the transfer because it’s already been accepted
- Your payer/recipient asks for the security answer via email or text message
- The security answer/question is something almost anyone could guess
The Pet Scam
While it might seem strange, it’s not uncommon for pet sellers and breeders to conduct business online, often using marketplaces like Kijiji. Unfortunately, there are many programs that scammers can use to create attractive websites, complete with pet profiles, customer reviews and fake licenses that look authentic.
Since some pets can cost hundreds of dollars or more, an e-Transfer might be preferable to paying by credit card. The supposed seller/breeder will then ask you for a deposit or payment before they deliver the animal, drop it off, or allow you to pick it up. Several days later, you’re left with no pet, stolen money, and a compromised bank account.
Warning Signs
Red flags of this scam type are as follows:
- The “seller” requests an unusually large deposit or shipping payment
- They ask you to make multiple e-Transfers to different recipients
- They won’t answer your emails, calls, or your questions
- Their animals/breeds are too exotic or rare to be available in Canada
- They refuse to let you come collect the pet or bring it directly to you
- Their credentials don’t check out (ie. no address, business license, etc.)
- They’re shipping the pet from a distant location (i.e. it wouldn’t survive the trip)
Always do your due diligence ahead of time and make sure you’re dealing with someone trustworthy.
The Bad Deposit Scam
Some scammers will steal from you by depositing fraudulent cheques that end up bouncing. Before that happens and the funds are put on hold, they may be able to send an e-Transfer to their own account. Sadly, you might not notice anything is wrong until the cheque doesn’t clear and the bank flags your account soon after.
Because this crime is often a two-person job that results in the sender and recipient being flagged, you may be labelled as an accomplice until a proper investigation is conducted. For a better idea of how a bad deposit scam works, look into “cheque kiting”, which is a common scheme done exclusively with cheques.
Warning Signs
Warning signs of this scam type include the following:
- Your bank card stops working or you get blocked from your account
- You’re notified that someone has accepted an e-Transfer you never sent
The Overpayment Scam
Sometimes, scammers will purposely send too much money via e-Transfer. Then, they’ll contact you claiming that they “accidentally” overpaid and request that you return the excess amount. The original e-Transfer either gets cancelled or bounces, leaving you scammed out the refunded amount. This scam is becoming increasingly popular these days.
Warning Signs
Some red flags to look out for include the following:
- The buyer or payer sends you more money than the agreed price and insists it was a mistake.
- The buyer urges you to refund the extra amount immediately.
- The buyer asks you to return the “overpaid” amount using a different payment method.
The Job E-Transfer Scam
In this scam, a potential “employer” will contact you about an employment opportunity on a job posting platform like LinkedIn, Indeed, or Glassdoor. This sometimes happens by email too.
The opportunity is accompanied by high pay and benefits for doing a job that’s too easy to be real, such as withdrawing money from an ATM and depositing it at a bitcoin machine. In this case, accepting and sending out e-Transfers would be involved.
Most of the time, the funds are being withdrawn from a secondary victim’s account. And, once again, your financial institution will flag your account because you’ve technically accepted fraudulent money. Until they determine that you weren’t an accomplice, you may not be able to conduct any transactions at all.
Warning Signs
Some red flags to look out for include the following:
- You don’t remember applying for the job
- The salary and/or benefits are too appealing to be true
- You can’t find legitimate information about the “business”
- The “employer” asks how much you’re allowed to withdraw from an ATM
- They ask if you can accept and send e-Transfers
- They want you to deposit money at a random bitcoin machine
- Their e-Transfers are sent from or accepted by a different business
What Should You Do If You’ve Fallen Victim To An E-Transfer Scam?
If you’ve become the victim of an e-transfer scam, it’s important to act quickly to minimize the damage and protect yourself from future fraud. Here are some steps you should take:
- Contact Your Financial Institution — If you notice in time, your bank may be able to cancel your e-Transfer before it reaches its destination. If not, they can at least try to track the transfer or launch an investigation to find the culprit.
- Report The Incident — File a report with the Canadian Anti-Fraud Centre (CAFC) by calling 1-888-495-8501 or using their online reporting system at antifraudcentre-centreantifraude.ca.
- Modify Your Bank Information — While your money may be gone, you can still ask the institution to give you new banking numbers or place a fraud alert on your account, which will notify you if any suspicious activity comes up.
- Change Your Passwords — Update your online banking passwords and any other accounts that may have been compromised.
- Contact The Police – If your financial institution can’t help you, the police’s cybercrime division might be able to investigate the situation, depending on the priority and severity of the scam you’ve fallen victim to.
- Read The Fine Print – In your online banking agreement, the institution has likely listed the factors that would or wouldn’t make them liable for a stolen e-Transfer, along with what you must do to be fully protected against such crimes.
How To Protect Yourself From E-Transfer Scams
An e-Transfer scam can be a tough problem to deal with and recover from financially. Thankfully, there are a few key “do’s and don’ts” that can help you avoid and protect yourself against these types of scams in the future, both as a sender and a recipient.
As A Sender
Take these precautions if you’re the sender:
- Whenever possible, avoid sending money to anyone that you don’t trust
- Create a security question that only you and your recipient can answer
- Don’t include the answer in the security question
- Don’t send any answers or passwords via email, social media, or text message
- If you have to share your security answer, do it over the phone or in-person
- Change your email/online banking passwords and security questions regularly
- Don’t use the same security question or answer with your other recipients
As A Recipient
If you’re the recipient of an e-Transfer, take these steps to protect yourself:
- Save any information that you receive from the transaction (ie. receipts, emails, etc.)
- If you don’t know the sender personally, research them or their business
- Don’t trust job offers, e-Transfers, or requests that seem suspicious in any way
- Ask the sender to constantly change their security questions and answers
- Make sure the sender creates a question that only you would know the answer to
- Don’t ask for the answer via any method that isn’t 100% secure
- Change your passwords often, and don’t use the same one for multiple accounts)
Final Thoughts
While e-Transfers can be fast and convenient, it’s important to be safe and do research before you send or accept money online. Remember, if the deal looks too good to be true, it probably is. Learn the types of scams out there, trust your gut, and don’t make these kinds of transactions with anyone you don’t know.
