Blocking investment, phishing, and service scams
March is fraud prevention month in Canada. That may elicit big yawns in most people – except when you yourself become a victim of a con. Fraud is a major criminal enterprise in Canada, and has only become more prevalent in our 24/7 plugged-in cyberworld.
According to the Canadian Anti-Fraud Centre (CAFC) in 2022, it received 70,878 reports of fraud totalling $530 million in losses. That’s up an astonishing 40% from the already record-setting $380 million lost to fraud in 2021. And that’s only the tip of the iceberg. CAFC reports that the actual figures are much, much bigger. It estimates that only 5%-10% of victims report fraud. At the upper end of the scale that could amount to billions of dollars in losses – never to be recovered.
Top frauds being perpetrated by criminals over the past year were phishing, extortion, and personal information scams, all frauds designed to get you to pay or give away sensitive information like your Social Insurance Number, passwords, or banking details. And according to CAFC, the top frauds with the highest levels of reported losses were investment scams, with cryptocurrency fraud at the top of the list, phishing, and service scams.
Cryptocurrency scams and frauds attempt to steal money, as well as personal and financial information. Fraudsters will offer you cryptocurrency buy-ins promising a high rate of return very quickly. Instead, the victim will lose their investment and sometimes suffer identity theft as well.
Cryptocurrencies operate independently of a central bank and are currently unregulated in Canada. The CAFC warns that there isn’t any protection from fraud or loss when using cryptocurrencies, as there is when using a credit card or making a bank deposit.
To avoid being swindled by cryptocurrency criminals, never respond to emails or social media messages with a “once-in-a-lifetime” opportunity to buy cryptocurrency at a rock-bottom price. And remember, too, that no government agencies will ever request payment in the form of cryptocurrencies (another often-used ploy by cybercriminals).
If you’re inclined to speculate in cryptocurrency, deal only with well-known and reputable exchanges, and even then, double and triple check. For example, FTX, a well-known and widely promoted crypto exchange, last year turned out to be a fraud. Most investors lost all their money. To protect yourself, purchase any hardware wallets directly from the manufacturer. And always do your research, preferably consulting your financial advisor before you make any transactions.
This is one of the most common scams going. The fraudsters pretend to be from a legitimate source, perhaps using actual email addresses of people or businesses you often deal with – a tactic known as “spoofing.” They attempt to trick you into revealing personal information, including passwords, or clicking on legitimate-looking links that in fact install viruses or malware on your computer. Sure signs that you are a target of a phishing scam include:
- Email and website name spoofing – unexpected messages with requests or demands you normally wouldn’t see from the legitimate sender.
- A sense of urgency.
- Offers of refunds or money.
- Instructions to click links, download attachments, or fill out forms or surveys online, always with a sense of urgency or deadline involved.
You might be asked to update your account or claim a tax or other refund. It’s fake, and nothing more than an attempt to get you to reveal personal or financial information. Variations include “urgent” messages about a recent purchase, a delivery notification (spoofing Canada Post, Fedex, or UPS), or an urgent message about an insurance claim or court appearance. If you click on a link or attachment in those types of messages, you will be handing a key to your computer and all the personal information on it to the bad guys.
Scammers offer any number of fake services, again by email, social messaging, and telemarketing, all involving some kind of advance fee payment. According to the CAFC, the most popular service scams include air duct cleaning, cellphone service provider, help with government documents, immigration website, low interest rate offers, pardon or waiver of a criminal record, resales (timeshares, cars, property are typically-reported scams), and tech support requesting access to your computer to fix alleged vulnerabilities or viruses, all of which are fake.
Remember: Always stop and think before you click on an offer or respond to an email or phone call. When in doubt, delete the message and block the sender, hang up the phone, and check with the person or business who is supposedly contacting you. For unsolicited investment come-ons, contact your financial advisor for advice before taking any action.
Robyn Thompson, CFP, CIM, FCSI, is the founder of Castlemark Wealth Management, a boutique financial advisory firm specializing in wealth management for high net worth individuals and families. Contact her directly by phone at 416-828-7159, or by email at email@example.com for a confidential planning consultation.
Notes and Disclaimer
The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned are illustrative only and carry risk of loss. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice. Please contact the author to discuss your particular circumstances.