Financial Literacy Newsletter – March 2023
Preventing fraud in a digital world
A few words from FCAC
Welcome to the Fraud Prevention Month (#FPM2023) issue of the Financial Literacy Newsletter. This year marks the 19th anniversary of an annual awareness campaign to help Canadians recognize, reject and report fraud.
Understanding how fraudsters think and operate is becoming an increasingly important skill to protect your finances. That’s why this year’s theme for Fraud Prevention Month is “Tricks of the trade: What’s in a fraudster’s toolbox?” Shining a spotlight on the key techniques that fraudsters use will help you to recognize fraud more quickly — the first and most important step in fraud prevention.
In this issue of the newsletter, you will learn about the eight signs that characterize digital fraud, real estate fraudsters’ tricks, and tips to protect yourself against identity theft, online fraud, and investment fraud.
Fraudsters are good at what they do. It can be difficult to identify a scam, especially if it seems to come from a company you do business with, like your bank. With more communication happening digitally, it’s important to know that banks will never ask for personal information, login credentials or account information by email or text message. Some fraud scams even pretend they are the Government of Canada, especially around tax time.
Staying informed and vigilant is your best protection against fraud. Increasing your knowledge and awareness will help you recognize and stop fraud and scams and protect you from becoming a victim.
Finally, if you have been a victim of fraud, the best thing to do is to report it to the appropriate authorities and to your bank or other financial institutions. By taking this step, you may be able to get back some of your losses and you are helping to prevent other people from becoming targets.
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Eight signs of digital fraud
It’s hard not to feel confused by the large number and variety of digital fraud and scams that you need to watch out for. The Canadian Anti-Fraud Centre lists over 80 in its regularly updated A-Z Scam Index. Fortunately, most digital fraud is characterized by a few easy-to-identify signs that can help you recognize fraud quickly and put you on your guard.
Here are eight signs of digital fraud:
Sign #1: You are pressured to make a decision fast or on the spot.
“You must act now. Tomorrow will be too late.”
Sign #2: The offer is too good to be true.
“High returns with little or no risk — guaranteed!”
Sign #3: You are asked to give financial information (e.g. personal identification numbers [PINs], credit card numbers, passwords, banking account information) or personal information (e.g. Social Insurance Number, date of birth, address, mother's maiden name) over the phone, by email, on social media or a website you do not know.
“We just need to confirm your information.”
Sign #4: You are asked to keep matters secret.
“Don't tell anyone or this fantastic opportunity will end.”
Sign #5: You are made to feel guilty if you refuse to go along with the transaction.
“You'll regret passing this up.” Or “I’m desperate. Only you can help me out with this urgent matter.”
Sign #6: You are given “insider information” that others don't know about.
“Very few people know about this. That's why it's such a hot tip.”
Sign #7: There are errors in spelling and grammar. This is not always a red flag for fraud, but it should alert you to watch for other signs.
Sign #8: The website address begins with “http” rather than “https” — the “s” stands for “secure.”
Not sure if it is fraud? When in doubt do not click on links, attachments or QR codes. Instead, contact the sender by another means to confirm they contacted you. You can phone them or visit the company’s website by manually entering the URL in your web browser or by searching for the website through a search engine.
Quiz: Fraudulent charges — are you covered?
Fraudulent charges on your debit and credit cards are a common form of digital financial fraud. The good news is that you’re protected from unauthorized transactions as long as you take reasonable care of your cards and your financial information.
Take this quiz to see how well you know your rights and responsibilities when it comes to fraudulent charges on your debit and credit cards.
1. An unauthorized banking or credit card transaction is:
- a transaction that appeared on your credit or debit statement that you didn’t make or didn’t approve
- a transaction set up as a pre-authorized debit
- a transaction that went above your credit and debit limit
- none of the above
Answer to question 1
Generally, any banking or credit card transaction that you didn't make or approve is an unauthorized transaction.
Unauthorized transactions may occur when your debit or credit card is lost or stolen. Someone could also steal your identity and use your information to make transactions without your knowledge or consent.
Each financial institution, such as a bank, may define unauthorized transactions differently. Read your credit card, debit card and account agreements carefully to make sure you understand what is considered an unauthorized transaction.
Visa, Mastercard, American Express and Interac have committed to protect you against financial loss if someone uses your credit or debit card without your permission.
You’re responsible for taking reasonable care to keep your account information and personal identification number (PIN) safe. If you did, they’ll usually reimburse you in full.
Did you know?
Did you know that you can’t share your PIN with anyone, even somebody you trust like your partner or a family member? Your bank may not cover your losses in case of fraud if you have not kept your credit or debit card PIN secret. Don’t share it with ANYONE!
2. Federally regulated financial institutions will protect you from financial losses related to debit card fraud that:
- occurs in a store
- results from technical problems such as an ATM that doesn’t give you the full amount of cash that you asked for
- occurs when you had already reported the card as lost or stolen
- all of the above
Answer to question 2
You’re protected against unauthorized transactions when you use debit card services in store, at a point-of-sale terminal or at an ATM.
You're not responsible for losses that result from circumstances beyond your control, which include:
- technical problems, for example, the ATM didn’t give you the full amount of cash you asked for, but still deducts the amount requested from the account
- unauthorized transactions, as long as you didn’t contribute to the loss by not taking the necessary steps to protect your PIN
You’re not responsible for losses due to situations beyond your control. For example, technical problems or someone used your card when you had already reported it as lost or stolen.
You could be responsible for losses in situations where you contribute to or encourage unauthorized use of your card.
3. If you are careful in safeguarding your credit card and its information, the maximum amount of an unauthorized credit card transaction that you will be responsible for is:
- your credit card limit
- none of the above
Answer to question 3
There’s a maximum amount you’ll be responsible for if someone uses your credit card without your permission.
If a bank issued your credit card, the maximum amount is $50, unless you demonstrated gross negligence (in Quebec, gross fault) in safeguarding your:
- credit card and its account information
- personal authentication information (including personal identification number [PIN], passwords or other information they use to verify your identity)
If a federally regulated financial institution other than a bank issued your credit card, the maximum amount is whichever is less:
- the maximum amount set by your credit card agreement
With debit cards, the maximum amount you’re responsible for usually can’t be more than the withdrawal limits of your debit card. However, you may be responsible for more than the balance of your account, if, for example:
- your account links to a line of credit or overdraft protection
- your account links to 1 or more other accounts
4. You could be liable for digital fraud on your credit and debit cards if you:
- use your date of birth or telephone number as your PIN
- share your card’s PIN with someone else, including a family member
- make fraudulent deposits with your debit card
- just a and b are correct
- a, b and c are correct
Answer to question 4
You could be liable for losses due to unauthorized credit and debit card transactions if you:
- use your date of birth or telephone number as your PIN
- told your card’s PIN to someone else, including a family member
- keep a written record of the PIN "in proximity to" the card, including writing your PIN on the back of the card
- didn't report your card as being lost or stolen in the amount of time specified in your card agreement
- refuse to cooperate in an investigation of unauthorized use
- made fraudulent deposits with your card
- didn't take the necessary steps to protect your pin
5. If you think an unauthorized transaction was made using your debit or credit card you should:
- change your passwords and notify your bank or credit card issuer immediately
- stop using your card
- contact the location where the unauthorized transaction was made to warn them
- none of the above
Answer to question 5
If you think an unauthorized transaction was made using your card or your account, or if there is a risk of this happening:
- change your passwords immediately
- notify your bank or credit card issuer immediately
- report any transactions you didn't make or approve
- check your credit report for any credit you didn't apply for
In some cases, you may need to report the incident within a specific amount of time, as specified in your agreement. If you don’t, you may be held responsible for the transaction and you may not get the full amount back.
For deposit accounts, such as chequing or savings accounts, you usually have 30 days after the date of your statement to dispute a transaction. However, this could differ from one bank to another.
6. You have a right to request an investigation of an unauthorized transaction on your credit or debit card:
- when the unauthorized transaction is worth more than $50.00
- when you think you might have made a transaction but are not sure
- whenever there is a transaction on your debit or credit card that you did not make or approve
- none of the above
Answer to question 6
Federally regulated financial institutions must always fully investigate a transaction that you report and that you dispute.
It doesn’t matter how someone processed the transaction, including:
- with your PIN
- by magnetic swipe, or
- through other technology
They should consider all factors that contributed to the unauthorized use of your credit or debit card. This includes circumstances beyond your control such as:
- someone forced you
- someone stole your card
- there was a system malfunction
- someone obtained your PIN through shoulder surfing
Shoulder surfing is when someone gets your PIN by looking over your shoulder. They do this while you enter it at an automated teller machine (ATM) or anywhere else you use your card.
7. A complaint to your bank or federal credit union about the handling of an unauthorized credit or debit transaction must be resolved:
- within a year
- within 6 months
- within 56 days
- there is no deadline for resolving a complaint
Answer to question 7
If you have a problem with a federally regulated financial institution, you have the right to make a complaint. This includes if you have a complaint about how the institution has handled unauthorized transactions on your debit or credit card. You do so by using the institution’s complaint-handling process. A bank has a maximum of 56 days to deal with your complaint.
What’s in a real estate fraudster’s toolkit?
The high price of real estate has attracted fraudsters and scammers. Real estate fraud can cause you to have large financial losses. Victims of real estate fraud may find out that they no longer own their home or that there have been additional mortgages taken out in their name.
One type of real estate fraud is called title fraud. Title fraud happens when the title to your home is stolen, and then the fraudster sells the home or applies for a new mortgage against it.
Here are four common fraudster tricks to watch out for and protect yourself from being a victim of title fraud:
1. Fraudsters steal your personal information so they can assume your identity
To protect your personal information:
- Ensure that your mailbox is emptied regularly
- Keep your mortgage information in a safe place
- Shred old documents before throwing them in the garbage or recycling
- Make sure you verify the identity of anyone you share your personal information with, especially over the phone
2. Fraudsters target vacant properties to delay fraud from being detected
To protect your vacant home:
- Ensure that somebody is regularly checking on it
- Ensure that your mailbox is regularly emptied. Forward your mail if you are away for a long period of time
- Consider buying title insurance, which will protect you from losses related to title fraud
3. Fraudsters target rental properties because it gives them physical access to your home
If you rent out your property, carefully screen tenants by:
- Meeting them in person
- Checking their references
- Requesting multiple pieces of identification
- Running a full credit report
4. Fraudsters often sell houses under market value so they can move fast and hide their assets
To protect yourself from losses related to title fraud:
- Consider buying title insurance, which will protect you whether you are a home seller or home buyer from losses related to title fraud
- If you’re a home buyer, be on alert when homes for sale don’t have for sale signs, are not listed, and when the price seems too good to be true
If you think you are a victim of real estate fraud:
- Write down when you noticed the fraud and the actions you took, including names of people you spoke to and dates of communications
- File a report with your local police
- Contact your financial institutions and any other companies where you think accounts may be affected
- Contact your provincial or territorial land registry office
- Contact Canada’s two credit rating agencies, TransUnion and Equifax, and ask them to put a fraud alert on your file
- Contact the Canadian Anti-Fraud Centre
In the news
Canada Student Financial Assistance Program reduces repayment requirements for student loans
Employment and Social Development Canada (ESDC) has made changes to the Canada Student Financial Assistance Program’s Repayment Assistance Plan effective November 1, 2022. These enhancements will provide important financial relief to young Canadians as they begin their careers.
Additional $500 Canada Housing Benefit available to low-income renters
Canada Revenue Agency (CRA) announced that applications for the new one-time, $500 top-up to the Canada Housing Benefit are now open. Eligible applicants can apply through their CRA My Account.
Campaigns and events
FCAC Money Management Competition
FCAC student research competition — Open for submissions
FCAC’s Building Better Financial Futures Challenge is a post-secondary student paper competition designed to promote the creation of actionable, evidence-based solutions to current financial challenges. The deadline to submit papers is April 30, 2023.
Global Money Week campaign educates youth about financial literacy
Global Money Week is an annual awareness campaign to help youth to acquire the knowledge, skills, attitudes and behaviours necessary to make sound financial decisions. #GMW2023 will take place from March 20 to 26.
Know a talented grade 6–12 economics educator?
Nominate them for the Bank of Canada Museum’s Award for Excellence in Teaching Economics! Closes March 12.
FCAC publishes new information to help you manage your financial health in challenging times
Managing financial health in challenging times shares information about how to handle financially difficult times, how to manage your money when interest rates rise, and tools to avoid financial hardship.
New podcast talks Indigenous Financial Wellness
“Money Smarts – AFOA Canada Talks Indigenous Financial Wellness with the Experts”addresses Indigenous Financial Wellness topics with experts. This series will enlighten and assist Indigenous community members in understanding their finances and help improve their financial well-being. Two series are now available: “Income Tax Filing” and ”Financial Self-Care”.
Free webinars from the Canada Revenue Agency (CRA)
The CRA is hosting free webinars on benefits and credits this winter for various audiences. The next session on benefits and credits for Indigenous peoples is on March 29th. Register today!
Money Matters publishes new financial literacy resources
Money Matters is a free introductory financial literacy program for adult learners developed by ABC Life Literacy Canada. Money Matters recently released three new resources:
New guide on female financial resilience available
The Financial and Consumer Services Commission of New Brunswick (FCNB) has released their new guide and on-demand presentation on the topic of female financial resilience.
Chartered Professional Accountants of Canada launches new financial webinar series to empower women
The Chartered Professional Accountants of Canada (CPA) has recently published “Owning Your Financial Identity”, a webinar series to empower women to become masters of their finances.
Words from our collaborators
Canadian Anti-Fraud Centre reports all-time high levels of financial fraud
Since 2020, the Canadian Anti-Fraud Centre (CAFC) has seen fraud victimization grow to shocking new heights. While we know that the COVID-19 pandemic exposed new vulnerabilities and increased the potential of fraud victimization, fraud losses continue to rise. Losses reported to the CAFC reached an all-time high of $383 million in 2021. In 2022, reports shattered that record at yet another all-time high of over $530 million in victim losses.
Fraud Prevention Month is a campaign held each March to inform and educate the public on the importance of protecting yourself from fraud. This year’s theme is “Tricks of the trade: What’s in a fraudster’s toolbox?”. This theme is meant to expose the common tactics that fraudsters use to victimize targets; if the public can recognize a tactic, they can protect themselves. We also plan on equipping our audiences with their own “toolboxes” by providing tips for protecting themselves. To read more about common tools fraudsters are using, visit: Tricks of the trade: What's in a fraudster's toolbox? What's in yours?
Did the CRA really contact you?
As a taxpayer, you should be cautious if you receive any communication that claims to be from the Canada Revenue Agency (CRA) and requests personal information.
Scammers may insist that personal information is needed quickly so that you can receive a refund or a benefit payment. Cases of fraudulent communication could also involve threatening or coercive language to scare you into paying a false debt to the CRA. Other communications could direct you to visit a fake website where you are asked to verify your identity by entering personal information.
It’s important to be aware of how and when CRA will contact you to distinguish legitimate communications from the CRA, and scams.
Red flags of a scammer or fraudulent communications include, but are not limited to, the following:
- no proof of working for the CRA, such as providing a name, office location, and contact information
- pressure for you to act right away
- aggressive language, threats of arrest or sending law enforcement
- requests for payments with prepaid credit cards, gift cards, cryptocurrency, or some other unusual form of payment
- requests for information you would not enter on your return or that is not related to money you owe the CRA, for example, a credit card number
- offers to apply for benefits on your behalf
Do not provide information to anyone offering to apply for benefits for you! You can apply for benefits directly on Government of Canada websites or by phone.
New scams are becoming more complex and believable. To stay up-to-date with scams impersonating the CRA, go to the CRA scam alert page. By being informed of the tactics that fraudsters use, you can avoid becoming a victim.
Visit the scams and fraud page for information about what to expect (and not expect) when Government of Canada departments and agencies, including the CRA, contact you.
Investment fraud: How a fraudster might approach you
There are many ways a fraudster might approach you. They might email, text or phone you. Or they might pretend to know the same people as you. Read more about the ways a fraudster could use to connect with you and tips to protect yourself.
Emails or text messages
There are countless scams sent through emails and text messages.
One common type is phishing. That’s when a stranger poses as someone trustworthy to try to get your private information, such as your passwords or banking information.
They may encourage you to click on a link or attachment. For example, they may pose as a financial institution or a subscription service, telling you to update information about your account.
The best way to deal with suspicious or spam emails is to delete them. If you reply to ask to be removed from a mailing list, you alert the scammer that your email address is valid. This will prompt them to send you more messages.
Use this checklist to protect your financial information online and help prevent identity theft.
Social media channels or websites
Many scams use social media channels or websites. Scammers may create fake accounts. Or they may gain access to someone else’s account and use that person’s information in a form of identity theft. Others may try to form online relationships that seem genuine but can also lead to affinity scams.
To protect yourself from fraud on social media networks, delete requests from people you don’t know. Check their account for suspicious signs such as low engagement or few posts compared to a large number of followed accounts. And review the privacy and security settings on your social media accounts to limit who can see or connect with you online.
To protect yourself from falling victim to an online fraud, learn to spot fake websites and verify legitimate ones.
Learn more from the Canadian Anti-Fraud Centre about social media scams.
Many scams start with a phone call from someone you don’t know. They may claim to be from a company you do business with or a government agency. Then, they may ask you to verify personal information like bank or credit card numbers.
Phone scammers may alter their caller ID so it looks like a legitimate business is calling you.
To combat phone fraud, don’t do business over the phone unless you’ve made the call yourself and you know the company and phone number are legitimate. If in doubt, hang up and call the company directly.
Be cautious when giving out your contact information. Scammers often get contact information from lists that are traded, sold, and re-used. Sometimes they’ll trick victims a second time in a recovery room scam where victims think they’re getting their money back.
Scammers use their association with a group, and your common interests, to gain your trust — and then take your money. They may also build relationships with leaders of the group to gain acceptance and endorsement. Affinity fraud and Ponzi schemes often operate through affinity groups.
Victims often don’t report affinity fraud for fear of embarrassment, or backlash from the group. They may try to resolve problems within the group, which can leave other groups vulnerable to the same scam.
Some investment seminars promote specific investment strategies that promise high returns. Products associated with high returns also tend to carry a higher level of risk. The investments themselves may not be fraudulent, but this type of promotion raises many red flags.
Presenters are usually good motivational speakers and may use high-pressure sales tactics. If you’re given time-limited offers or feel pressured to buy, walk away.
Try the Ontario Securities Commission’s Scam Spotter tool.
Many scammers are not registered to sell investments. Check the seller’s registration and get a second opinion from a qualified advisor, lawyer, or accountant.
If you think that you may be a victim of investment fraud in Ontario, contact the Ontario Securities Commission (OSC) at 1-877-785-1555 or email@example.com. You can also contact the OSC if you have any questions about investing or have a complaint about a company, an investment product, or the conduct of an advisor.
Be aware: Don’t become an accomplice in mortgage fraud
Mortgage fraud is a type of financial crime that can have serious consequences. This type of fraud is more common than most people realize.
What is mortgage fraud?
Mortgage fraud is when someone deliberately misrepresents or omits information on a mortgage loan application to secure financing for which they otherwise wouldn’t be eligible. It can also include activities like:
- identity theft
- document forging
- money laundering
CMHC estimates that mortgage fraud costs the industry billions of dollars each year in Canada.
Common types of mortgage fraud
It’s important to understand the different types of fraud so you can protect yourself from becoming a victim or an accomplice. Common types of mortgage fraud include:
- lying about your work position, income or the length of time you’ve held your job
- stating you’re a full-time salaried employee if you’re not
- misrepresenting the amount or source of your down payment
- not disclosing debts or other mortgages
- acting as or using a “straw buyer” – a person whose good credit is used to get a mortgage for someone else
Borrowers who misrepresent information and straw buyers who allow a property to be purchased in their name are committing mortgage fraud. They’re liable for any financial losses in the event of default. They may also be held criminally responsible for their misrepresentation.
Tips to protect yourself
The best way to protect yourself from mortgage fraud is to know the warning signs. By being aware of potential red flags, we can help stop fraud before it starts.
Here are some tips to help you avoid becoming a victim or an accomplice in mortgage fraud:
- don’t add your name to another person’s mortgage unless you plan to make payments on it
- don’t sign papers until you understand them – get legal advice or have them translated
- know who you are doing business with – only deal with licensed or accredited mortgage and real estate professionals
- get independent advice from a lawyer/notary – talk to them about title insurance or other ways you can protect yourself
- be suspicious of anyone who approaches you with an offer to make “easy money” in real estate – if a deal sounds too good to be true, it probably is
Knowledge is power when it comes to protecting yourself from mortgage fraud. March is Fraud Prevention Month, but this knowledge should stay with you year-round as you navigate your way through the home-buying process.
CMHC offers several resources to help you recognize potential warning signs of mortgage fraud and how to report it.
Information to help keep you safe from mortgage fraud.
Recognize, prevent and report scams that target seniors.
How to report mortgage fraud
If you suspect you’ve been the victim of mortgage fraud, contact your local police department. Or contact the Canadian Anti-Fraud Centre.
Stay safe online: Social media accounts and phishing
Get Cyber Safe is a national public awareness campaign created to inform Canadians about cyber security and the simple steps they can take to protect themselves online.
Here are two resources to learn how to stay safe online:
1. How fraudsters use your social media accounts to their advantage
The number of Canadians using social media is on the rise with an estimated 89% of Canadians using the various platforms. Though social media is great for staying connected to friends and loved ones, if you’re not careful with how you use it, fraudsters can take the information they learn from you to commit various cybercrimes. Get Cyber Safe by learning about the risks to you and how to practice safe social.
2. Fight phishing and ruin a fraudster’s day
If you have an email address or cellphone number, use social media or browse the internet, chances are you’ve received a phishing message. Phishing is a fraudster’s attempt to get sensitive information by pretending to be a legitimate sender like a bank or a government organization. But spotting a phishing message isn’t always easy. Play this Get Cyber Safe phishing shanty on repeat to get the signs of a suspicious message stuck in your head.
Cyber Security Awareness Month
Get Cyber Safe, on behalf of the Communications Security Establishment (CSE), is the Government of Canada’s lead for Cyber Security Awareness Month (Cyber Month), an internationally recognized campaign held every October to inform the public about the importance of cyber security. Visit GetCyberSafe.ca and follow them on social media for consistent cyber security guidance and to learn more about this year’s Cyber Month theme and planned activities (Cyber Month 2023 information to come soon!).
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