The rise of the internet and technology has not only made our daily activities more convenient but has also opened up opportunities for scammers. Fraudsters are always coming up with new ways to trick their targets, and sadly, they are often successful. A recent study by CPA Canada’s annual fraud survey revealed that 46% of respondents had fallen victim to financial fraud at some point in their lives. What is more worrying is that 70% of the financial losses reported in 2022 were related to emails, social media, or the internet. This blog post outlines some of the scams that are currently taking the greatest financial toll on Canadians and offers advice on how to protect yourself.
Investment fraud is the most financially devastating type of fraud, with losses nearly doubling from $164 million in 2021 to $308.6 million in 2022, according to the Canadian Anti-Fraud Centre (CAFC). Cryptocurrency investment platforms are one of the most popular methods fraudsters use to scam their victims. They start off with small investments that generate huge profits, and the victim then invests much more, sometimes their entire life savings. Unfortunately, the platform is entirely controlled by a fraudster who disappears with their money or charges them huge withdrawal fees.
The best way to protect yourself from this type of scam is to do your homework. In the crypto world, people often let themselves be led by the euphoria of the moment and the lure of gain, rather than choosing established platforms that produce audited reports. Therefore, it is essential to check if the investment platform or seller is on the Canadian Securities Administrators’ “Are They Registered?” list and if it is on your provincial securities regulator’s list of unlicensed firms. It is also vital to be reasonable with your expectations because no investment can guarantee mind-boggling profits, especially if it is presented as risk-free and short-term. Furthermore, you should never hand over control of your electronic devices to a stranger. Watch out for other variations on this scam, including fixed income investment schemes, franchise and business opportunities, gem scams, initial token offerings, and pyramid schemes.
Online Dating Scams
Online dating scams accounted for $59 million in losses in 2022. The perpetrator generally creates a fake profile on social media or dating sites, then starts showing interest in a target. Once a relationship develops, they start asking for money, whether it be for travel, a medical emergency, family assistance, or other reasons.
To protect yourself from online dating scams, look out for red flags. You should be suspicious if someone you’ve never met professes their love for you, if that person always has an excuse not to meet in person, if they try to “guilt” you into sending them money, or if they ask you not to talk about them with family and friends. Always avoid sending money or personal information to someone you haven’t met in person. Be especially vigilant if you belong to the most targeted demographic. Victims are often single people, aged 40 and over, who have cash on hand or the ability to easily convert an asset into cash when needed.
The emergency scam is not new, but it’s on the rise, with $9.4 million in financial losses reported in 2022. The scammers aim to make targets believe that a loved one is in urgent need of money due to injury, arrest, bail, and other similar situations. Seniors are particularly vulnerable as they are told that their grandchild needs rescue, says Larocque.
To make their stories more believable, fraudsters often use accomplices, such as fake police officers, court agents, and lawyers, and even send them to collect money from victims, which can be dangerous.
To avoid falling prey to this scam, it is crucial to be wary of calls from people claiming to need money immediately. Don’t get swept up in the sense of urgency created by the caller. Instead, take a step back and find out the facts for yourself.
If the caller claims to be a law enforcement official, do not engage with them. Instead, hang up and call your local police directly using a phone number from a reputable source.
Seniors are at the highest risk of financial loss from this scam, accounting for nearly 30 percent of the reported financial losses by the CAFC. Therefore, it’s essential to be especially vigilant if you’re in this target group.
Identity theft is another common scam, and it’s one that affects people of all ages. In fact, young people are particularly vulnerable. More than three out of five 18-to-34-year-olds say they’ve experienced at least one type of financial fraud in their lifetime, according to a CPA Canada survey. The best way to protect yourself from identity theft is to practice good cyber hygiene. This means using strong passwords, activating multi-factor authentication (MFA), checking your credit rating regularly, and being careful about what you share online.
To avoid Identity Theft be cautious and mindful of potential pitfalls when you use the internet. Be especially careful if someone contacts you asking for money or personal information. Always practice good cyber hygiene with the use of strong passwords, activate MFA, and check your credit rating and transactions regularly. Don’t share personal information on social media or connect to unsecured networks. Always stay up to date with you apps or software that you don’t use or that haven’t been updated in a while.
It’s also important to remember that user-friendliness and safety don’t always go together. Many techniques that can protect you from scams may seem obvious, but people often choose user-friendliness over safety. That’s why there’s still a lot of awareness work to be done.
Protecting yourself from scams and identity theft requires ongoing vigilance and attention to detail. By following these tips and staying aware of the latest threats, you can reduce your risk and keep your personal information safe. If you’ find yourself falling ‘ve been a victim of fraud, we can help. We employ an entire division of fraud investigators whose sole mission is to detect, deter, and defeat fraud.