How to Avoid Fraud and Scams

Expert advice on how to recognize fraud in action-and protect yourself if you’ve fallen prey to a scam.

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The Changing Face of Fraud in Canada

The Changing Face of Fraud in Canada

Throughout human history, people have attempted to dupe others. But the forgers and snake oil salesmen of yesteryear would be gobsmacked by the sophistication of 21st-century scams. The Internet has changed the face of fraud. 

Canadians lost more than $70 million to con artists in 2014. (That figure accounts only for reported cases, which may represent fewer than five per cent of all incidents.) And increasingly, those dollars are disappearing online. According to a list of the most common frauds put together in 2015 by the Better Business Bureau, nine of the top 10 offenders were Internet-related. “These scams are easy to set up,” says bureau rep Evan Kelly. “They cost no money and take no time.” 

Like phony paintings and quack cure-alls, modern cons are most effective when they appear to be official. But there are ways for you to see through even the slickest scams. “We have our work cut out for us,” Kelly explains. “We can’t take it at face value that these things are legitimate just because they look spiffy on our computer screens.” 

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Tips for Avoiding Fraud

Tips for Avoiding Fraud

The most plausible schemes bank on the credibility of a brand that people know and trust, like the Yellow Pages or the RCMP. Throughout 2015, authorities received complaints about the “Canadian Revenue Agency scam,” in which a cold caller posing as a CRA representative demands a hefty tax payment. If the victim doesn’t deliver, they’re threatened with arrest, outrageous fines or prison. 

In another common con, a caller from “Microsoft” gains remote access to the target’s computer and claims it has been infected with a virus. The owner is coerced into handing over credit card information to pay for a repair. Meanwhile, the caller fishes for personal information, such as a social insurance number. 

Bogus calls like these are based on numerous suspicious situations: a long-lost relative who needs money, a prize you have to pay to claim. And in some cases, a victim inadvertently enables a con: many websites promise high-end brands at too-good-to-be-true prices. But two weeks after the consumer buys what they believe to be a brand-name jacket, they receive an obvious knock-off-or worse, nothing at all. 

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How to Spot a Scam

How to Spot a Scam

Many people assume that seniors-who may be lonely, less technologically literate and dealing with waning mental acuity-are easy targets. A 2012 report by Stanford University’s Fraud Research Center in California determined that existing research on the topic doesn’t prove that to be universally true, but scammers still hold it as gospel, says Rebecca Judges, a PhD student at the University of Toronto studying the deception of elders. “There’s this idea that older people can be confused easily,” she explains, adding that fraudsters speak quickly and aim to confuse their victims. “If someone is trying to rush you, that’s a cue to back off.” 

Con artists frequently request money in the form of wire transfers, according to Daniel Williams, a senior fraud specialist at the Canadian Anti-Fraud Centre, though he notes perpetrators will also ask for and accept other forms of payment. Elaborate excuses involving time constraints or otherwise unusual circumstances are warning signs in themselves. 

If you have any doubts, a simple Google search can often clear things up quickly; you may want to try looking up the caller’s phone number or the name of the organization they claim to be representing alongside the word “scam.” While bad guys can exploit the Internet, it’s also full of information about countless ruses, Williams says. “Five people can’t be taken on one scam anywhere on this planet without at least two of them blogging about it.” 

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What to do if You've Been Scammed

What to do if You’ve Been Scammed

“Usually, once you have parted with money, it’s gone for good,” Williams says. But that doesn’t mean victims are powerless. He recommends reporting the crime to police-particularly if you’ve given away personal information, which can lead to identity theft-to create a paper trail. You should also inform all the appropriate organizations, such as a bank, credit card company or wire-transfer service. “Let everyone involved know as many details as you can give,” he says. “Even in cases where the money has been lost, the effort of reporting it may save someone else who’s just in the initial stages of the scam.” 

The Stanford scam study found that victims don’t report for a number of reasons: they’re embarrassed, they’re not sure who to tell, they don’t realize they’ve been conned. Additionally, they may not see the value in informing authorities like the Canadian Anti-Fraud Centre, which uses complaints to target the operations behind the fraud. Without that information, “the suspects will never have to change things,” Williams says. “If it’s not reported, it never happened.” 

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