Watch Out For Your Wallet: Top Canadian Financial Scams

Watch Out For Your Wallet: Top Canadian Financial Scams

In this day and age, there’s no shortage of people who are willing to steal from you and not give a second thought about it. There are also a ton of ways they can do it. With the internet, and everyone having a phone in their pocket, taking people’s money has become way easier than holding them up at gunpoint.

According to the Better Business Bureau of Canada, our country’s citizens have lost over $1 billion to all types of internet, phone, and mail scams in the last two years. After all, scam artists are called “artists” for a reason. Thieves have made entire professions out of simply being good manipulators and preying on people like the elderly, hopeless romantics seeking love in the wrong places, and young people who’ve just started using their first credit cards.

Here is a list of the top Canadian financial scams you should watch out for.  

The Advanced Fee Loans Scam

This scam targets people who are looking to get a loan, whether it be for their house, car, or business. Over the last few years, this scam has helped criminals steal over $1 million throughout Canada. It happens when people get involved with a shady loans company and are asked for an advanced fee to be approved for a loan (learn more about this scam here). The victim, desperate to finance something important to them, forks over their money. Alas, they’re not going to see any of that loan money, or their deposit again.

How to Avoid This Scam

Know that in both Canada and the United States, it is illegal for a credit or loans company to demand an advanced charge. If the company you’re considering does not have a legitimate name and reputation and is not listed in the Better Business Bureau database they’re probably scammers. If you’re unsure about the contract you’ve been given pertaining to the loan or if you’re suspicious in any way, please proceed with caution and take any extra steps necessary to make sure you are not being scammed.

P.S. If you haven’t already, please take a moment to read our message to our clients about scams we encountered recently.

Help Me! You’re My Only Hope!

This one usually targets the elderly and has resulted in the loss of almost $2 million countrywide over the last two years. The victim will receive a call from someone claiming to be a relative, maybe a distant grandchild, whose voice they might not immediately recognize over the phone. They’ll often know personal information about the victim to make them believe they’re a true family member. The scammer then begs for money because they’re in jail and have no one to bail them out. Or, maybe they’re sick and need money for medication. They’ll ask to have money wired into their account, and of course, the victim will never hear from them again. In addition, the victim’s banking information is often compromised.

How to Avoid This Scam

Remember, pretty much everything is online these days. If you’ve got a Facebook account or something of the sort, a scam artist can find out almost anything about you and use it to their advantage. Unless you know 100% that this person is your relative, or confirm their identity with another family member, do not hesitate to hang up on them and never transfer money to anyone that you’ve never met before.

The CRA Income Tax Scam

This particular scam has claimed over $3 million country-wide since its start in 2015. A person will typically receive a call or email, most likely an automated message claiming to be from the Canadian Revenue Agency (CRA). The message will declare that the recipient has not been paying part of their income taxes and owes a sizeable amount. A serious voice will say something along the lines of: “warning, do not attempt to ignore or delete this message, as you owe (this amount), and you will be fined or arrested if you do not contact us immediately.” They’ll leave you a number where you can get in contact with one of their “agents.” The clever part of this scheme is that the Canada Revenue Agency is a real organization, so if they’re contacting you, it must be serious, right? So, once you call back, this thief will manipulate you into paying a sum via credit card or by giving your bank account information, and just like that, your money is gone and your identity is compromised.

For more information on this scam, read our more in-depth article here.

How to Avoid This Scam

The most important thing to know is that the CRA is most likely never going to ask you to pay anything, taxes or the like, over the phone or on the internet. If they do, they’re certainly not going to send you an automated message or email. If you’re uncertain of whether the message is real, go on the official CRA website, where they’ll list a number to contact them with any inquiries, and they’ll quickly tell you that no, it was not them who called you. If you have fallen victim to one of these scams, have your credit card cancelled immediately and contact your bank to have your account information modified and protected.

The Secret Shopper

This one is called an Employment Scam and preys on those who are looking for their dream job. It has caused almost $4 million dollars in losses in Canada. In this case, the victim will receive a job offer, usually by text message, to be a Secret Shopper, who rates the customer service at various stores, all well spending the employer’s money to buy things with a “certified” cheque. The catch: they ask the victim to send back whatever money they haven’t spent, which of course has to come out of their own bank account. After it’s too late, their bank will contact them saying the cheque has bounced. 

How to Avoid This Scam

Beware, because the money will come in the form of a cheque, it can take days for it to be processed and then be revealed as a fake. No one is just going to offer you a job out of the blue, especially if you haven’t applied for it. On top of that, no business should ever charge you anything to work for them. If this has happened to you, the money you sent may be lost, but you can at least contact your bank, and they’ll take the proper steps to protect your banking information.

The Private Sale

Recently costing Canadians over $5 million, the Private Sale Scam usually happens when someone is looking to sell or buy something through an online classifieds website, think Craigslist or Kijiji. If you’re trying to sell something, a scam artist will send you a cheque that is larger than the amount you asked for. They might say it was a mistake, or maybe to cover the shipping costs. They’ll get you to cash the cheque and then send them the difference back in cash or a wired amount. In the case of buying, they might ask you to do the same, pay them by wiring cash to their account, or by using a credit card. In both cases, you’re never going to get that money back or receive the item you wanted. Because this is all online, through a website that doesn’t confirm 100% who a person is, there’s pretty much no way to track the scammer.

How to Avoid This Scam

First of all, you should never wire money to anyone you don’t know, or for that matter to anyone over the internet. If you or they have something to buy or sell, meet them or have them meet you with cash up front. If they offer you a cheque for more than was agreed, it’s most likely a scam.

The Imposter

This scam is commonly known as “spear-phishing,” and has claimed close to $6 million over recent years. The victim receives an email or phone call, which is supposedly from a company that’s reputable, maybe a bank, online store, or another website that they’ve had a relationship with in the past. The scammer tells them that their account has expired, possibly that they need to download this other software to protect themselves from attack. It might sound something like: “this is Windows, you need to update your computer’s security.” Offer up a credit card number and all their problems go away, right? Wrong. They’ve just been scammed.   

How to Avoid This Scam

The scam artist may have set up a website that looks similar to your bank’s, or another website that you’ve used before. If they send you a link, be suspicious of it. If you’re uncertain, look up the regular company website for yourself, contact them if need be. In any case, do not give away any personal information or your credit card number. If you have, same as before, cancel your credit card and wipe your computer’s hard-drive, because once you’ve downloaded the software or “malware,” the scammers can monitor your keystrokes.

Read this article for everything you need to know about loan scams in Canada.

Investment Fraud

This scam has been around for decades, and in the last few years has cost Canadians over $6 million. A con artist will offer you the chance to invest in a business or product that will earn you a huge reward with little to no risk on your part. Obviously, if you give them the money, you’ll never see it again. Simple, but effective in a lot of cases.

How to Avoid This Scam

There are pretty much no investment opportunities in existence that have little to no risk involved. If the deal seems too good to be true, it probably is. Never invest in a product or company that doesn’t have a rock solid reputation, and if you’re unsure, always get a second opinion from a financial expert.    

Congrats! You’ve Won The Lottery!

Another classic that has been going on for years through the mail, phone, and internet in all forms and fashions. Over the last few years, the fake lottery or prize scam has claimed well over $6 million from Canadians. A person will receive a letter, phone call, or email from a company, maybe claiming to be a recognized lottery organization just to grab your attention. The message will show that you’ve won a lump sum of money or another prize. All you need to do is send them a fee in order to claim said prize. It’ll be something relatively small $30-50, probably in cash, just so that you don’t get too suspicious. But again, as soon as you’ve sent the money there’s no way you’ll get it back, and of course, you won’t be receiving any lottery winnings.

How to Avoid This Scam

Like other scams, you can recognize the fake lottery because whatever type of message you receive will be vaguely worded, contain lots of exciting numbers, and exclamation points! These are little tactics they’ll use to draw your attention away from the fact that the message is total garbage. No official lottery company is not going to just call you up one day and tell you that you’ve won a prize for no reason. If you’ve received a call, hang up immediately. If it’s a letter, throw it away. If you’ve never opened an account with an official company like LotoMax, and you get an email, probably titled something like: “You’ve Won!! Check this Out!!”, just delete it right away without even opening it.  

The Heartbreaker

Responsible for a momentous $15-16 million in Canadian dollars lost in recent years, the “cat-phishing” scam, is the most successful scam on the market. Not many people are more vulnerable than those looking for love. Across the country, people are subscribing to online dating websites, especially the free ones. They’ll start getting messages from someone that’s not only attractive in their pictures but amazing in every way possible. Some time into their online relationship, that person will lay out a sob story of how they need money for some tragedy they’re going through. The victim, so tempted by their affection, will wire them money. If the scammer is good enough, they can play that victim for weeks, asking for more and more money every time, all the while coming up with excuses not to meet up in person.

How to Avoid This Scam

If anyone, no matter what they look like or how they speak through text, asks for money online, this is a red flag. Never give out your personal or banking information online, especially if you don’t know who’s asking for it. If you want to use a dating website, make sure it’s one that has been certified. True, some of them charge a fee, like E-Harmony, but that is because they’re a reputable site with a history of success. Either way, make sure you do your research properly and don’t jump the gun just because someone posts a stock picture of an attractive person.

Learn how to protect yourself from identity theft here.

True, there are a lot of ways that a person can scam you. They can be skillful and charming. The key is to always think first about what they’re asking you for. Money, everyone wants it, everyone needs it. So if anyone is asking you for money that isn’t someone you know and trust, or a real company or store, they may be trying to make you into easy prey. If you’ve been scammed, stay calm, contact your bank or credit card company as soon as possible. They see cases like these all the time and will find a way to help you get back on your feet.   

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