The Government of Canada has designated November as Financial Literacy Month. As Licensed Insolvency Trustees regulated by the federal Office of the Superintendent of Bankruptcy, LCTaylor is thrilled to participate in this highly worthwhile initiative. One of the topics that Financial Literacy Month is focusing on for 2020 is avoiding telephone and online scams and other forms of financial fraud during Covid-19.
This is always an important topic, but particularly this year due to the number of schemes targeting people relying on government assistance during the COVID-19 pandemic. Unfortunately, fraudsters have been taking advantage of the dire financial situation in which many Canadians find themselves. They have adjusted their scams and devised new ones to take advantage of people dependent on the federal emergency relief benefits, such as the Canadian Emergency Relief Benefit (CERB) and the Canadian Recovery Benefit (CRB). Because these programs are new and unfamiliar, it is harder for the public to differentiate between genuine calls and emails from government and fraudulent ones.
What Is Financial Fraud?
Financial fraud is when an individual, group of individuals or a company harms you financially by misleading you, lying to you, or using other tactics of deception. There are different types of financial fraud, with some of the most common listed below.
Identity theft is when someone obtains information used to confirm your identity with financial institutions, such as your Social Insurance Number, date of birth, password and/or PIN. This information, combined with things like your address and telephone number, can be used to open financial products in your name. The fraudster gets the money, but the bank or credit card company comes to you for the repayment.
Confidence scams are when someone gains your trust and then uses it to benefit themselves financially, at your expense. This can be done either by building a relationship with you over time or by impersonating someone that you already trust, such as a family member or a government official.
For example, a scammer may pretend to be a Canada Revenue Agency employee and encourage you to pay a non-existent tax debt to them. Someone else may pretend to fall in love with you over the internet in the hope that you will eventually send them money. Also, confidence scams can also be used to obtain personal identification information in order to commit identity theft.
Pressure scams are when someone puts you in an uncomfortable situation in the hope that you will make a poor financial decision because you aren’t thinking clearly due to the stress, or simply to get out of the situation.
Door-to-door salespeople can be an example of this. Some come to your door and make it difficult for you to get rid of them without buying whatever they are selling. Others gain access to your space by claiming the need to test water or air quality, check your water heater, or similar situation. Once in, they deliver shocking bad news, which may or may not be true, and use your surprise to coerce you into making a bad decision.
How Can I Avoid Being Defrauded?
To protect yourself from financial fraud, it is important not to agree to anything hastily, and to verify the information that you have been given before giving any personal data or agreeing to anything. If someone calls you, claiming to be someone that you trust, make sure that you are certain that it is them before giving any information.
For instance, if someone calls you claiming to be from the Canada Revenue Agency, say that you will call them back in a minute. Then hang up and phone CRA directly on their official phone number (not the number they may have given you) and tell them about the call that you received. They will be able to confirm if it is genuine or not. Don’t be fooled by the number or name showing on your call display, as these can easily be faked. Unless you have called someone yourself on a number that you know to be correct, you don’t know who you are really speaking with.
If you feel that you are in an uncomfortable position, don’t make it worse by agreeing to something just to get out of it. Instead, say that you will take the information that you have been given and consider it. Ask for a number where the person can be contacted at a later time. This will allow you to make a decision with a clear mind, unclouded by the pressure of the situation. Don’t fall for salespeople offering a special discount that expires if you don’t accept the offer on the spot. If they are willing to do the deal on certain terms at the time, why wouldn’t they do the same deal on the same terms a couple of hours from now?
As a simple way of protecting against fraud, never give out personal identifying information to anyone on the phone. Never give out a bank account number or a credit card number to someone who has contacted you. If it is your bank or your credit card company calling, they would already have that information and should not be asking for it, in any case. Hang up and call the bank or company in question at a number that you know with certainty is the correct number.
What Should I Do If I Am the Victim of Financial Fraud?
The governments of Winnipeg, Manitoba and Canada all offer resources and assistance to people who have fallen victim to financial fraud.
Municipally, instances of financial fraud can be reported to the Winnipeg Police Service. Information on doing so can be found here.
Provincially, reports can be filed with the Consumer Protection Office of the Manitoba government. Nationally, the federal government has established the Canadian Anti-Fraud Centre. As well as a website to report financial fraud, they offer extensive information about various types of scams that have been reported to them.
Once the fraud has been reported, consider what damage may have been done. For example, if your credit card information has been compromised, contact your card provider right away to let them know. They will be able to help you limit the damage that results from the theft. If your online passwords or banking PINs have been stolen, change them for any and all accounts that you used them with. It is important to act fast, as the fraudster will likely be trying to access things before you have a chance to change them.
Unfortunately, not all fraud can be reversed. Money sent in error is often irretrievable, as is money stolen through identity theft and other acts of fraud. If you have suffered from financial fraud, and it has resulted in you having debt that you are unable to repay, you may have no choice but to file a Consumer Proposal or a bankruptcy.
If you believe that this could be the case, or if you would like to discuss what other options may be available to help you recover from the damage of fraud, please don’t hesitate to contact us at LCTaylor. We know that there are many sophisticated schemes out there that intelligent people can fall for, and we will discuss your situation with empathy and without judgment.