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Fraud: What Canadians need to know – Part 2

Fraud-part2

Welcome to the second in our four-part Fraud series – a series of articles created to provide you with insights into the 12 most common types of fraud or scams, and tips on how to protect yourself.

In 2019, nearly 45,000 Canadians fell victim to fraud, losing more than $96 million, according to the Canadian Anti-Fraud Centre. Below, we discuss three more popular scams from The Little Black Book of Scams that you need to be aware of:

Health and medical scams

The three most common types of health scams are miracle cures, weight loss programs, and fake online pharmacies. These often appear as sponsored posts on social media or website pop-ups. 

Scammers offer products and services that seem to be legitimate alternative medicines and treatments that quickly and easily treat serious conditions. Some of these may seem to be endorsed by celebrities or promoted by testimonials of people claiming to have been cured.

Weight loss scams promise dramatic results with little to no effort. The scammers might promote unusual diets, revolutionary exercises, fat-busting devices, or breakthrough products, such as pills, patches or creams.

Fake online pharmacies offer drugs and medications at very cheap prices or without a doctor’s prescription. They advertise on the internet and send spam emails. If you do receive the promised products, there is no guarantee they are the real thing or safe to take.

Tips to protect yourself

  • Remember that there are no magic pills or miracle cures for achieving quick weight loss or treating medical conditions
  • Don’t trust claims about medicines, supplements or other treatments. Get the facts straight from your healthcare professional
  • Never commit to anything under pressure, especially if a large advance payment or long-term contract is required
  • Know that if an online pharmacy is legitimate, it will require valid prescriptions
  • Be skeptical of celebrity endorsements or testimonials

Romance scams

Keep your guard up and look out for potential scammers who will try to lower your defences by appealing to your romantic and compassionate side. Scammers prey on unsuspecting victims through legitimate and fake dating sites.

On a real dating site, a scammer might send you a few messages and a good-looking photo of themselves, or of someone they claim to be. Once you are charmed, they will start asking you to send money. They may claim to have a very sick family member or a desperate situation with which they need your help. Once you give them money, they often disappear.

A fraudster can also create a fake dating site where you pay for each message you send and receive. To keep you writing back and paying, the scammer may hook you in with vague emails about their love and desire for you. In many cases, the scammer may even arrange to meet up with you in person to make their fraud seem more credible.

Tips to protect yourself

  • Never send money or give financial details on a dating site
  • Trust your instincts, ask questions, and carefully read the terms and conditions before signing up
  • Know which services are free, which ones cost money, and what it takes to cancel your account
  • Make sure you only use legitimate and reputable dating sites. Always check website addresses carefully, as scammers often mimic real web addresses
  • Remember that it’s very unlikely that someone will declare their undying love to anyone after only a few letters, emails, phone calls or pictures (sorry!)

Business scams

A typical business scam is the directory scam. A fraudster sends your company a proposal for a listing or advertisement in a magazine, journal or business directory, or for an online directory. They’ll call to confirm the address and other details. Then the accounting department will receive and pay the bill, unaware that your company never actually ordered or authorized the service.

Another common fraud is the health and safety products scam. You might receive a phone call from someone claiming to be from the provincial government, telling you that your first-aid kits need to be replaced or you have to update your company’s health and safety training. In both cases, you may be told to act quickly.

One other possible scam is the office supply scam, which involves you receiving and being charged for items you didn’t order.

In many cases, scammers will hound you to pay the amount they claim you owe. They will even trick you into believing that they will report you to a collection agency.

Tips to protect yourself

  • Educate yourself, your employees, and your co-workers to be cautious of unsolicited calls
  • Create a list of companies that are typically used by your business
  • Limit the number of staff who can approve purchases and pay bills
  • Clearly define procedures for verification, payment, and management of accounts and invoices
  • Contact your province’s regulator to understand your legal obligations
  • Fraudsters will use company names or logos similar to those of known businesses to make their invoices seem real. Inspect invoices carefully before making any payments

In our next installment, we discuss three more popular scams, and how you can protect yourself. Stay safe!

Written by Salina Shariff, Financial Wellness Leader at People Corporation.

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