Financial Literacy Newsletter - March 2021
Preventing financial fraud
A few words from FCAC
The Financial Consumer Agency of Canada (FCAC) is pleased to participate in Fraud Prevention Month. Taking place every year in March, this education campaign brings together organizations - including government departments and agencies, law enforcement, consumer and volunteer groups, and businesses - with the aim of helping Canadians recognize, reject and report fraud. This year’s theme is online fraud and we encourage you to join the conversation by using hashtag #FPM2021.
In this special edition of the newsletter, we focus on types of financial fraud and ways Canadians are being impacted. We also include information and links to valuable resources to help you prevent and protect yourself and your family from fraud. FCAC and the Government of Canada also offer a wealth of information about financial and other types of fraud including identity theft and other threats or scams.
As March also marks Global Money Week (March 22-28), an international campaign promoting youth financial literacy, we’ve included an article on starting the money conversation with kids. This article points to some great resources and a competition for kids – but hurry, the deadline is fast approaching!
March is also a month that many Canadians start thinking about preparing their income tax return. For many, doing their taxes may be a bit different this year due to the impact of the COVID-19 pandemic. Canada Revenue Agency (CRA) has an informative webpage CRA and COVID-19 changes to taxes and benefits to help you as you prepare your 2020 tax return. The newsletter also includes information about the Community Volunteer Income Tax Program—virtual tax clinics available to eligible Canadians where their income tax returns can be prepared for free.
Are you familiar with the terms open banking and fintech? The Government of Canada is currently reviewing the potential of introducing open banking in Canada. Open banking is a secure way for you to share your financial data with financial technology companies (often called fintechs or fintech apps). To help consumers understand open banking, FCAC recently published new web content on open banking and updated its content on fintech apps. In addition, FCAC is contributing to the government’s review of open banking and recently published its recommendations to ensure consumers are protected.
As always, we invite you to browse through FCAC’s tools and resources, check out the amazing content on our COVID-19: Managing financial health in challenging times webpage, as well as browse the resources and events in the Canadian Financial Literacy Database.
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- FCAC has published new information on open banking. This educational content aims to help financial consumers understand what open banking is and factors to consider when using online tools and mobile apps to do their banking.
- FCAC launched the Building Better Financial Futures student competition in January 2021. Post-secondary students are invited to submit a research paper that proposes a solution to a personal finance, consumer protection, and/or financial literacy problem. Deadline for submissions is April 30, 2021.
1 in 3 Canadians are targets of financial fraud during the pandemic
Fraudsters have found opportunity in the COVID-19 pandemic and are preying on peoples’ fears and using misinformation. In fact, one in three Canadians indicated they have been targeted by attempts to obtain their financial information through phishing or hacking, according to data from a recent FCAC survey.
Fraudsters are very sophisticated and are counting on their victims to fall for their scam and provide them with information so they can steal your identify or your money. If you’re suspicious about information you receive electronically or via telephone, do your research before providing any personal information, answering any questions or clicking on links. Look up the information about the organization and contact them back at the publicly listed email or telephone number to confirm whether they are really the ones contacting you or whether it may be a fraudster.
Here are some tips to help you keep your information safe:
- Never give out your personal or financial information in email or text or over the phone.
- When banking online, ensure you log onto the correct site by entering your bank’s website in your browser yourself.
- Beware of questionable offers, if it seems too good to be true, it probably is.
If you think you’ve been scammed or you’ve accidentally given your information to a scammer, you should:
- change all your passwords immediately, including those for your online or mobile banking and email accounts;
- ask your financial institution to place a fraud alert on your accounts;
- regularly review your bank account or credit card statements to make sure there is no suspicious activity; and
- order a free credit report and carefully check for anything unusual or incorrect.
If you’re a victim of fraud, it’s important to:
- contact your financial institutions immediately;
- report the incident to your local police;
- contact Canada’s two credit bureaus, Equifax and TransUnion, and ask them to place a fraud alert on your credit report file; and
- contact the Canadian Anti-Fraud Centre or visit their website and complete an online report.
The Government of Canada has several sources for more information on fraud prevention and protection:
- Consult FCAC’s protection from fraud and scams web content to learn more about identity theft, types of fraud, counterfeit money and other threats or scams.
- Visit the Competition Bureau’s Preventing Fraud webpage for practical resources like The Little Black Book of Scams, promotional materials, videos and how to report fraud.
- Take the 10-question Get Cyber Safe Checkup to find out if you are keeping your online accounts safe. You’ll receive your cyber safety assessment score as well as tips based on your responses.
- Read the Canadian Anti-Fraud Centre’s list of COVID-19-related scams to learn how to protect yourself.
- Check out the resources and videos on the Canada Revenue Agency’s Be Scam Smart webpage and learn how to verify if what you received really comes from the government.
Unauthorized credit or debit transactions can happen to anyone
More of us are using our credit and debit cards to make purchases as a result of the COVID-19 pandemic. But with incidences of fraud increasing as well, it’s important to understand your rights if someone uses your card without your permission.
You also have certain responsibilities to make sure you are protected, including taking reasonable care to keep your account and PIN safe. Here are three things to keep in mind:
1. Protect your PIN
Keep your PIN secret. Never share it with anyone, even a family member. This means you cannot share your PIN with your spouse even if you have a joint account. Do not use a PIN that someone can easily guess, such as a birthday or telephone number, or keep it written down on the back of your card or on a piece of paper in your wallet. It’s also a good idea to change your PIN from time to time.
2. Report unauthorized use of your card right away
If your card is lost or stolen or you become aware of an unauthorized transaction, let your financial institution know right away. It’s a good practice to regularly review your credit and debit card statements to check for any transaction you didn’t make. Your credit card or debit agreement will tell you if you have to report the unauthorized transaction within a specific amount of time.
3. Exercise your right to an investigation
Even if the chip and PIN were used, your financial intuition cannot automatically hold you liable for the transaction until they complete an investigation. During its investigation, the financial institution should consider all factors that contributed to the unauthorized use of your credit or debit card account. It’s important that you work with your financial institution to ensure a positive outcome.
Watch FCAC’s video “Understand PIN Protection” to learn more about why it is important to protect your PIN.
Countering the tide of online fraud
By the Canadian Bankers Association
Fraud can happen anywhere, anytime and to anyone. From phishing scams and fake phone calls, to romance scams and email account compromises, criminals are finding new and sophisticated ways to steal money and personal information. That’s why fraud awareness and prevention are so important.
In today’s digitalized world, fraudsters have largely shifted their illicit activities online. Increased reliance on Internet-enabled services and online connection pre-dates the coronavirus pandemic, but as more and more Canadians migrate to cyberspace, the risk of cyber crime rises exponentially. Whether it is e-commerce and remote work, or digital banking and Zoom calls with family and friends, Canadians are spending more time online and thus should stay vigilant to prevent fraud.
Most scams have the same aim: to obtain access to a person’s data in order to misappropriate their funds, or in some cases, use identity deception to con them into sending money to an account controlled by the fraudster. Banks in Canada take extensive steps to protect their customers’ information and invest significant resources into their security infrastructure, including layered fraud detection and mitigation technologies. But in the digital era, security is a shared responsibility. Canadians have an important role to play in protecting their sensitive accounts and information, adhere to safe online practices, and distinguish between legitimate requests and attempted fraud.
The Canadian Bankers Association (CBA) and its member banks widely share information resources to educate Canadians of the latest scams and provide actionable tips on how they can detect and avoid fraud and practice effective cyber hygiene. The banking sector also collaborates with law enforcement, government departments and agencies, regulators, and other organizations to help Canadians stay cyber safe.
The CBA also dedicates a significant portion of its two financial literacy programs, Your Money Students and Your Money Seniors, to fraud awareness and prevention. Developed in collaboration with the Financial Consumer Agency of Canada, the programs not only help Canadians improve their financial well-being, but they also help them spot the signs of financial fraud and provide tips on how to protect themselves online. Despite a growing understanding that cyber security is essential in a digital world, some Canadians still need help understanding that simple steps can make a big difference in protecting personal and financial information from criminals.
The Your Money Seniors fraud prevention seminar, one of three seminars comprising the program, is the most popular module. The CBA has delivered over 60 sessions to more than 2,400 Canadians across the country, which shows the growing importance of fraud awareness and Canadians’ desire to ensure a safer future for themselves and their families.
There are many easy to implement actions to stay safe online. Start with these:
Text version: Habits to keep you safe online
Habits to keep you safe online
- Create a "passphrase" instead of a password. Don't share this with anyone.
- Check if the email sender is legitimate. Fraudsters may disguise their identity.
- Beware of emails from people or companies that you do not know.
- Do not click on links in any suspicious looking emails or reply to them.
- Only give your personal information to people and organizations you trust.
- Type in the address for internet banking and avoid clicking on email links.
- Only bank on secure websites with the padlock symbol in the address bar.
- Avoid public computers and WiFi for internet banking (e.g. cafés, libraries, etc.).
- Keep your computer's security software up to date.
Learn more at cba.ca/fraud.
What every homeowner needs to know about title fraud
By First Canadian Title (FCT)
The increasing reliance on a digital landscape has created more opportunities for fraud, particularly within the real estate industry. For those who know the intricacies of the real estate and lending markets, title fraud makes for fast and easy money. If you own a home, you could be at risk.
What is title fraud?
It typically involves fraudsters using stolen identities or forged documents to illegally transfer the ownership or title of a property to themselves. They can then take out a new mortgage on the property and disappear with the money or register forged documents to sell the property, discharge the existing mortgage (if one is outstanding) and then get a new mortgage against the property’s clear title. All while the original homeowners are completely unaware.
Typically, homeowners only find out about title fraud once it’s too late. That may mean a lender who gave out a fraudulent mortgage is trying to foreclose on a home or in one case, an owner tried to pay his property taxes and was told that, according to municipal records, he no longer owned his home!
How can you protect yourself from title fraud?
Here are some tips to help keep you safe:
- Title fraud often starts with identity theft, so make sure you verify the identity of anyone you share your personal information with, especially over the phone.
- Keep your mortgage information in a secure place and don’t throw old information in the trash or recycling bin; shred it.
- Speak with a lawyer before giving anyone the right to deal with your assets.
- Check that you have title insurance on your home.
Why is title insurance important?
While you may take all the right precautions, there’s no guaranteed way to prevent title fraud. That’s where title insurance comes in. Title insurance protects you by covering the legal expenses and many other costs related to restoring your title, if you fall victim to real estate title fraud. It also saves you a lot of time and frustration. Even if you didn’t get title insurance when you first bought your home, you still have the option to buy it.
What should you do if you become a victim of title fraud?
If you suspect that you may be a victim of fraud, take the following steps immediately:
- Make note of the date you first noticed anything suspicious and your actions directly following (names of anyone you may have contacted about your suspicions).
- Reach out to a credit bureau like TransUnion and/or Equifax, and request that they place a fraud alert on your file.
- Contact your local police station and the Canadian Anti-Fraud Centre.
- Speak to your bank or any other financial institutions that you think may be affected.
- Get in touch with your lawyer and the land registry office. Your lawyer will likely help you make a claim on your title insurance policy or you can contact your title insurance provider directly.
3 money concepts to start the conversation with kids
Parents and guardians, and even teachers, play a key role in teaching kids about money and helping them develop good money habits early. Helping young people develop the knowledge, skills, and confidence to manage money will help them throughout their lives and will contribute to their financial well-being as adults.
When kids reach their teen years, focusing on money matters becomes even more important as they will soon be considering their first credit card, signing a cell phone contract, or starting a part-time job.
We’ve identified 3 money concepts to help start the conversation.
1. Understanding money transfers
Electronic money transfers, or e-transfers, are an easy way to send money to others, or to receive it. It is important to understand that these transactions should be treated like cash, because they cannot be cancelled once they have been deposited by the recipient. When sending an e-transfer, youth should make sure to:
- send money only to someone they know and trust, because some scammers may try to get money by e-transfer in exchange for goods, services, or a prize;
- choose a security answer that someone cannot easily guess;
- safely share the answer with the recipient. This means, for instance, not to share it in an email or text message; and
- understand the fees banks charge to send, cancel or correct e-transfers.
2. The importance of protecting personal financial information
It may be tempting for kids to download and use a third-party app to help them manage their money. With convenience, comes potential risks. It is important that they read the user agreement and understand how their information will be protected and potentially used by the app. For instance, some apps sell client information for marketing purposes.
Even if the app promises to protect their information, it’s still their responsibility to keep their personal financial information safe. Sharing personal financial information could mean that no matter what security features the app has in place, their financial institution may hold them responsible for lost money because of unauthorized transactions or fraud.
3. Start saving early
Getting into the habit of saving when young will pay rewards in the long run. Whether their income comes from an allowance, doing odd-jobs or a part-time job, kids who regularly save a portion of their earnings are developing a good habit that will help them throughout their lives.
The great part? It does not have to be a big amount – saving regularly is a key element to improved financial well-being. For younger kids, setting up “save” and “spend” jars at home will get them into the habit of putting part of any money they get into their “save” jar. They will also visually see that money adding up.
For kids with a part-time job and a bank account, they can set up an automatic savings program. This will move a pre-set amount of money into a separate savings account every payday. Most people don’t even miss the money being transferred and they soon have a savings account to help out with unexpected expenses or a special purchase.
Here are some additional resources to help you start the conversation with kids:
- FCAC has a webpage dedicated to Teaching Kids About Money that contains information on money concepts for different ages, including allowances, spending, credit cards and cellphone contracts.
- Global Money Week (March 22-28) is an annual global awareness campaign that focuses on the importance of youth achieving financial well-being. This year’s theme is “Take care of yourself, take care of your money”. During this week, FCAC will be sharing practical information on social media. Follow us @FCACan and join the conversation.
- Bank of Canada Museum has launched a new inquiry-based lesson plan for grades 5–10: Money: Past, Present and Future. The new lesson plan reflects on money’s history, both from Canada and abroad.
- The Canadian Foundation for Economic Education’s Talk With Our Kids About Money program offers resources for both teachers and parents/guardians. This year, they are offering a Virtual Money Fair competition for grades 4-8 with a chance to win prizes. Submissions close on April 1, 2021.
Get your taxes done at a free virtual tax clinic
By the Canada Revenue Agency
Free tax preparation is a vital service provided to eligible Canadians who need help with their income tax returns. You might be able to get your tax return done for free by volunteers at a free tax clinic:
- Volunteer tax clinics help people with low and modest incomes and a simple tax situation who are looking for support during tax season
- CRA is working with partner organizations to make sure these virtual clinics are safe and secure and that private information is protected
- Trained volunteers prepare income tax and benefit returns free of charge. For virtual clinics, this can be done by videoconference or by phone
- Community organizations are hosting free virtual tax clinics
To find a clinic near you, go to canada.ca/taxes-help.
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