Leading into tax season, you may see a few more calls or important messages from “CRA” (wink, wink). But, getting caught up in a scam is no laughing matter. Can you spot a fraudulent call or email before it’s too late?
The Canadian Anti-Fraud Centre (CAFC) reports that $530 million was lost to fraud in 2022. That’s up from $384 million in 2021. There are so many scams that the organization has an alphabetized index to list them. Here’s a sampling of some to watch out for.
If you receive a telephone call, email, text, or letter mail from CRA you can rest assured it is 100% false if:
- It asks for payment by e-transfer, cryptocurrency, prepaid credit card, or gift card.
- Asks for a fee to speak with an agent.
- Is urging you to act quickly, threatening, or aggressively coercing in any way.
How to verify the real CRA
- Ask for the name, location, and CRA agent code. Then hang up. Call CRA and ask for the specific agent. Follow this link for more information on how to verify a call from CRA.
- Log into your CRA account for up-to-date, reliable information.
- Contact CRA directly.
“You won the lottery” scams
Patrick Schmitt, a financial consultant at Tidewater in Virginia gave us permission to share this story he recounted in a professional chat group.
“Watch out for scams! I overheard this at a UPS recently:
An elderly lady was at the UPS store to send money. She had been working with a Publisher’s Clearing House (PCH) agent to get her winnings but had to send money to a local apartment in order to get her earnings. Both of the UPS employees were skeptical and kept asking her for more information. A police officer dropping off a package overheard the exchange and helped the lady call PCH. The official PCH representatives said they could not find her information in their system.
Despite the protest of the staff and officer, the lady still overnighted the funds!
Some big red flags:
- Sending money to get money.
- Sending to a personal address for a major company.
- Uneasy feelings from yourself or others.
- Verification from the actual company of a potential scam.
Stay smart, stay informed. If it seems too good to be true, it probably is!”
Tech support scams
This scam may happen as a pop-up on one of your devices or a phone call from a fake technician. You’ll be told that you’ve been hacked and must provide information and a fee for the messenger to “fix” the issue. Do not engage, consider your options first. Often it’s not a real threat but if it is an actual ransomware attack, this article from Tom’s Guide steps through what you should do.
Online purchases scams
Make sure what you’re buying online is from a credible source. If not, you could be providing a deposit or making a purchase for just about anything that isn’t real including property rentals, concert tickets, and even puppies!
A few tips on how to verify an online seller:
- If you are buying from Facebook Marketplace or Kijiji, do not disclose personal information or provide money up-front and meet in a public place to make transactions.
- Google the person or company and select reviews that are not associated with them or their website. See what else comes up. Who are they? What are they up to on social media?
- Speaking of social media, there are hundreds of ads selling products and services on all social media platforms. Check them out away from the platform to verify their legitimacy before you buy.
- Check grammar and spelling. If language is sloppy, that’s a red flag.
- Look at the address bar on any online website and ask yourself “does this address look legitimate?” Look at the full URL (from http… to the first /). Look for minor typos or similar-looking characters (such as a capital I and lowercase L) that can change addresses.
- Copy the URL of a website and paste it into Google Transparency for a report on the site’s safety.
Worthy cause scams
Scammers love to pull on your heartstrings to gain “your support”. Unfortunately, now more than ever, we need to question what is real and what is not. A story published by CBC Toronto in 2020 covered a couple who had scammed churchgoers into donating hundreds of thousands to their sick children who were in fact, healthy.
Fake websites that promise big returns on cryptocurrency or other types of investments can look very professional. Such bogus investment sites have been around for decades, but they are becoming more sophisticated. The ultimate goal is to separate you from your money.
Investment schemes employ tactics that play on our emotions and prompt us to make impulsive investment decisions.
Fear of missing out (FOMO)
Maybe you receive an e-mail with a remarkable offer to watch a high-impact video or read an article on a new trend or breaking news on a development in the cure of cancer. The information is well-packaged, filled with facts and trendlines that are woven persuasively into a rationale for taking action now before you miss out on the opportunity. You get caught up in the excitement and you invest. This drives up the price of the shares at which time the perpetrator unloads the overhyped stock for a large profit.
You listened to the YouTube video posted by these hucksters, believed you had done your research, and bought the overpriced, overhyped shares. You look back later, “What was I thinking?” You were taken in by a “pump and dump” scheme which played on the fear of missing out.
Fear of loss/resistance to change
A second tactic plays on the tendency to resist change, which is the fear of loss. You are urged to take action to protect what you have against the corruption of big business, or big tech, or the government. This tactic may use anti-establishment rhetoric and the latest conspiracy theories to draw you in. The video or article includes compelling charts and graphs that convince you the existing securities market is about to collapse, or the government is going to steal your money, and without question, your money will be safer if invested elsewhere (ultimately in the perpetrator’s pocket or corporation or trust or maybe securely hidden in a fake cryptocurrency account).
To learn more about how to protect yourself against investment scams, visit your provincial securities commission website. For Manitobans visit the Manitoba Securities Commission investment fraud website or consult your province’s securities commission for more information.
These tactics are being used every day. In the moment they are so believable.
We all need to be on guard. Be discerning and reach out to us if you need any help along the way. If you have been the victim of fraud, you are not alone. Report it to the authorities and let us know.
The information in this commentary is for informational purposes only and not meant to be personalized financial planning advice. The content has been prepared by the team at Fraser & Partners from sources believed to be accurate.