How to Spot and Avoid E-Transfer Scams

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.

Types of E-Transfer Scams 

As mentioned, 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:

• 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. 

• You sell something online or in-person, the buyer says they’ll transfer your money once they receive the product/service, then a similar thing occurs. 

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.   

Check out more ways on how to send money to a bank account. 

Warning Signs

• 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 or program to break into and monitor these kinds of accounts, 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.

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Warning Signs

• 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 really cost hundreds of dollars, 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.

Find out what you should do if you’ve been a victim of credit card fraud. 

Warning Signs

• 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 (no address, business license, etc.)
• They’re shipping the pet from a distant location (i.e. it wouldn’t survive the trip)

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

• 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 

Check out this common loan scam in Canada.

The Job E-Transfer Scam

Here, 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. Of course, 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 or, in this case, accepting and sending out e-Transfers.  

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. 

Check out why wire transfers are often used in scams. 

Warning Signs

• 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?

Scam artists are always coming up with clever ways to steal from you, particularly online, where security may not be tight (no matter what a financial institution tells you). What’s worse, in most scenarios, your bank or credit union won’t claim responsibility for the crime or reimburse you in any way for the money you lose to an e-Transfer scam.

Essentially, to avoid any lawsuits, most financial institutions will do or say almost anything to avoid being held liable, even if the e-Transfer was intercepted because of their own poor security protocols. So, unless you can prove that the e-Transfer scam was 100% the bank or credit union’s fault, chances are you won’t get your money back. 

Nonetheless, there are a few things you can do to have your account protected better or stop the scam from happening again, such as:

• Call your financial institution immediately – If you notice in time, they 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. 

• Contact the authorities – 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.

• Have your banking information modified – 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. 

• Be patient but persistent – A financial investigation can take weeks, even months to yield any results. Don’t give up. Keep calling, as there are rare cases where the bank or credit union will compensate you for part of your loss. 

Find out how long it takes to receive an e-transfer.

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

• 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

• Save any information that you receive from the transaction (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 your sender(s) 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 (don’t use the same one for multiple accounts)

Need to send money abroad? Check out these international money transfer services.

Registering For Auto Deposit 

Despite the lack of security steps involved, registering for Interac e-Transfer Auto Deposit can be one of the safest and easiest ways to make sure you and your sender/recipient are protected against scams. After all, the money will go straight into the recipient’s account, hopefully, faster than any hacker could intercept it. 

There are a few other things you can do to make an Auto Deposit e-Transfer even safer, including but not limited to:

• Create unique emails – Some financial experts recommend that you create multiple email addresses with different names. Actually, you can have 5 different emails registered to the same e-Transfer profile with your bank.

• Use tough passwords – We can’t stress this enough. It’s extremely important to consistently update and use cryptic passwords for all your online accounts, including your email, bank account, and social media platforms.

• Double Check Your Sender/Recipient Info – Before you send or accept an e-Transfer, be sure it’s coming from or going to someone you trust, like a friend or family member. If you’re unsure, give them a call or visit them to confirm. 

• Take it for a test run – Don’t send or accept the full transfer amount right away. Instead, send or accept the smallest amount of money possible to confirm that everything is secure and your recipient/sender is who they say they are.

• Monitor your accounts & devices – There are plenty of good antivirus programs that can help protect your computer or mobile device against various threats and detect any spyware, malware or signs of hacking on them.

• Don’t spend money from an untrustworthy source – You or your recipient should receive a notification of any new money appearing in your account. If you have no knowledge of this transfer, inform your financial institution right away.

Not Sure if Your E-Transfer is Safe?

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. Trust your gut and don’t make these kinds of transactions with anyone you don’t know.