Financial Literacy Newsletter - March 2019
Fraud Prevention Month
A word from the Commissioner
FCAC is pleased to participate in Fraud Prevention Month, which is celebrating its 15th anniversary. Organized by the Competition Bureau, an independent law enforcement agency, this annual education campaign brings together public and private sector organizations across the country every March in encouraging Canadians to recognize, reject and report fraud.
Avoiding fraud is all about staying informed and taking an active role in protecting yourself. Fortunately, there are plenty of useful resources available to help you arm yourself against fraudsters.
In this special edition newsletter, we have compiled a number of articles and tips from organizations involved in combating fraud to help you avoid becoming a victim. These resources will help you to recognize the signs of possible incidents of fraud and how to prevent it from happening to you or somebody you know – whether someone is trying to scam you over the phone or the internet, by mail or even in person.
This month, we’re also raising awareness of the importance of reporting fraud. The Canadian Anti-Fraud Centre estimates that less than 5% of fraud victims report their experiences to law enforcement agencies. We can do better. By reporting a scam, you help the appropriate authorities stop fraudsters and prevent other people from becoming targets.
You can report fraudulent or suspicious activity to the Canadian Anti-Fraud Centre, through its website or by telephone at 1-888-495-8501.
I also encourage you to read my blog post on Fraud Prevention Month. Happy reading!
Don’t buy into online shopping fraud
The online world may offer tremendous convenience to consumers, but it’s also an anonymous space for fraudsters, who swindled more than $13 million from Canadian shoppers in 2017. They used a variety of tools to do this: fake retail websites and third-party sites, counterfeit goods, vendors that vanish after you’ve paid, phony free trial offers, hyperlinks that can launch malware, software that collects your personal data during a purchase, and more.
Top tips to avoid scams with your online purchases:
Verify the seller
Build in security
Shop online only from a secure connection and ensure that the websites you visit are also secure. If a site shows a broken key or an open padlock symbol in your browser, it means the transaction isn’t secure and could be intercepted by a third party. When the key symbol is complete or the padlock is locked, or the web address begins with https://, it’s a secure transaction.
Keep personal identity data to yourself
Be your own gatekeeper about personal information. Never divulge your Social Insurance Number, date of birth, driver's license number or any other information to a seller. If they’re asking for such information, be cautious — it could be a scam.
Check out the checkout
Before checking out, make sure you’re still on a reputable website and have not been redirected to a third-party page. Consider paying with a credit card, as many providers offer protection or refunds. Keep an eye out for any pre-checked boxes at checkout
After the sale
Monitor your bank and credit card statements frequently to review your purchases and payments as they happen. Watch for discrepancies, like repeated or unknown charges.
Remember that much of online security is up to you. Be vigilant and protect your money, your identity and your peace of mind.
It pays to check: help stop counterfeit notes
Cash is a quick and easy method of payment. But each time you accept a bank note (bill) without checking it, you risk becoming a victim of counterfeiting.
Whether you’re the clerk or the customer, you can help stop counterfeit notes from entering the cash flow. You just need to check your notes. Canadian bank notes have security features that are easy to verify and hard to counterfeit. If you know your notes, you’ll be able to detect a counterfeit at a glance.
Here are some basic tips:
- Compare a suspicious note (bill) to one you know is genuine
- Check two or more security features
- Look for differences, not similarities
- If you do not know how to check an older paper note, ask for a polymer note instead
Get to know the new vertical $10 note
The vertical $10 note featuring the portrait of Viola Desmond has bold security features ensuring that Canadians can use it with confidence.
It is being rolled out gradually, and will circulate alongside other $10 polymer notes, until the older ones are worn and need to be replaced.
Here’s how to check it:
- Feel the smooth, unique texture of the note. It is made from a single piece of polymer with some transparent areas
- Look for transparency in the large window
- Look at the detailed metallic images and symbols in and around the large window
- Look at the pattern in the colour-shifting eagle feather on the back of the note
- Flip the note to see the metallic elements inside the large window repeated in the same colours and detail on the other side
This same basic checking method applies to all polymer notes. To learn more about the security features on Canadian bank notes, visit the Bank of Canada webpage on banknotes.
Protect yourself from investment fraud
Investment fraud is easier to recognize when you know what it looks like. To protect your money and achieve your financial goals, it’s important to stay ahead of fraudsters.
You can minimize the risk of falling victim to investment fraud by spotting common red flags:
High returns with low risk
In general, higher-risk investments offer higher potential returns, and lower-risk investments offer lower returns. This is known as the risk-return relationship. Be wary of someone promising exceptionally high returns with little or no risk.
Hot tip or insider information
The sources of "hot tips" or "insider information" don’t have your best interests in mind. Think about why they’re offering you tips and how they benefit by telling you about them. Also, acting on insider information about a public company is illegal.
Pressure to buy now
Fraudsters frequently use high-pressure sales tactics to get your money and then move on to other victims. If you’re asked to make a decision right away, be very cautious.
Seller is not registered to sell investments
Before you invest, check the registration and background of the person offering you the investment. In general, anyone selling securities or offering investment advice must be registered with the securities regulator in your province or territory.
One of the ways to avoid investment fraud is to check the registration of the person or company offering you investment products or services. The Ontario Securities Commission (OSC) administers registration of firms and individuals who sell securities and provide investment advice in Ontario. To find your local regulator, search for an individual or a firm on the National Registration Search on the Canadian Securities Administrators website.
Another useful way to protect yourself is to make sure you always understand what you’re investing in. Don’t be afraid to ask questions and get a second opinion. Only make investment decisions that you are comfortable with.
You can learn more about protecting yourself from investment fraud on the OSC’s financial consumer website.
What is real estate fraud?
With advances in technology, consumers need to stay vigilant. Criminals are getting craftier and more skilled in identity and data theft. Once they have your information, they can forge documents to take out a mortgage on your home, or even sell it out from under you.
There are different types of real estate fraud to watch out for, some of which are:
Title fraud and forgery
The ownership or title of a property is changed or documents are forged to allow a criminal to illegally sell or refinance the property.
A homeowner in default on their mortgage is deceived into transferring their property title in exchange for a loan or for assistance with their mortgage. The new title holder imposes payments that are not sustainable for the homeowner and they end up losing their property and equity along with it. The homeowner’s payments are not used to pay off the mortgage, and the criminal can re-sell or remortgage the home.
A realtor or investor sells the same property multiple times at increasing prices before the initial sale closing date. The initial seller ends up making less while the last buyer pays an inflated value for the property.
How can you protect yourself from real estate fraud?
Protect yourself and your property from fraud. Make sure your information is safe online and monitor your credit cards, bank accounts, and even your mailbox for anything that isn’t yours. If you’re having issues paying your mortgage, try to speak to your lender and refinance or come to an agreement on what works for you instead of relying on untrustworthy sources.
The best way to protect yourself against title fraud is to get an owner’s title insurance policy. With a title insurance policy, property owners can rest easy knowing their title will be defended if their ownership is ever challenged, and they will be protected from other issues like survey and title defects.
Fraud comes in many forms, and it’s up to you to stay informed and protect yourself.
How fraudsters target older Canadians and what to watch for
According to CARP, Canada’s largest non-partisan, non-profit advocacy association for older adults, 35% of its more than 300,000 members report that they know someone who has experienced elder abuse. Fraud, financial or otherwise, is only one form of abuse, and the aftermath can be devastating, both financially and emotionally.
Scamming older adults is a multi-billion dollar enterprise across North America and is one of the many forms of elder abuse. In Canada, the “Canada Revenue Agency (CRA) Scam” cost seniors $898,000 in 2017 alone, according to the Canadian Anti-Fraud Centre. That same agency reported that “Romance Scams” are likely the most costly, amounting to almost $25 million in 2018, up from $17 million two years earlier. Those are reported estimates; most scam victims don’t report that they’ve been victimized for reasons of shame, fearing they won’t be believed, language barriers, or that they may lose their independence as a result. Authorities do not know the actual financial impact of scams against older adults.
Fraudsters know that some older adults can be vulnerable. Contributing factors to vulnerability include cognitive challenges or mental health issues, physical frailty, lack of a supportive network and a living situation that puts the victim and the abuser under the same roof. However, even socially connected, computer-savvy and socially outgoing seniors can get scammed. So how can scams be avoided? CARP has answers to some of the most common.
The romance scam
Don’t believe in love at first click, no matter how fabulous you are. If your online suitor has shared a photo, it’s most likely fake. Never transfer money to facilitate a face-to-face meeting. It’s better to be safe than broke and heartbroken.
The CRA scam
Don’t trust caller ID. Fraudsters are able to manipulate technology to make calls show up as coming from the Canada Revenue Agency. If you are threatened with arrest or deportation, don’t believe it. No government official would ever make such threats. If you are told to not tell anyone, hang up and tell someone; the Canadian Anti-Fraud Centre should be your first call.
The inheritance scam
A scammer contacts you online asking for help to claim an inheritance locked in a safety deposit box in another country. If you wire them money to pay for shipping the inheritance, they promise that you’ll get paid back right away. “I can only trust you.” This scam usually plays on one’s need for love, trust and money. Hit the “delete” button.
Funeral and cemetery scam
There are two despicable scams at play in this category. One is perpetrated by unscrupulous funeral homes that add unnecessary, fraudulent charges to a grieving family’s invoice. The other involves scammers who watch the obituary columns and contact widows and widowers stating that the deceased owes an outstanding amount for a service or contract, and then harasses them for payment. If you feel bullied in any way about money at a time of grieving, it’s important to do your research, select a well-respected funeral home, and ask for help from an objective friend or relative.
You consider yourself to be computer savvy. After searching online for help with an error message on your computer, you find an ad for an online company offering to fix the error if you allow them to take control of your computer screen. With access to your computer, the fraudster can install a virus – or worse. Be aware of “stranger danger” and use only trusted or recommended suppliers.
If you are a loved one or a family member of an older adult, talk to them about the kinds of fraud now targeting seniors in Canada, how much is at stake, and what to look out for. All in all, if something sounds too good to be true, it likely is. Walk away, and don’t hesitate to ask for help.
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