Welcome to the final installment of 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.
Fraud is never-ending and always evolving. Even as technology advances with thumbprint, voice, and facial recognition, fraudsters continue to develop new ways to challenge security. We cannot afford to let our guard down.
According to The Little Black Book of Scams, there are 12 common types of fraud or scams. Below are three more popular scams you need to be aware of.
Purchase of merchandise scams
Online shopping is a favourite pastime for many Canadians. But some of the great deals you see online—from inexpensive designer purses to significantly discounted electronic goods—may be too good to be true.
Fraudsters can create accounts on legitimate auction sites, such as eBay, or on an online marketplace, like Kijiji or Craigslist. They will advertise their products at very low prices, enticing you to buy them. At the end of the day, if you do get something, it might be of poor quality or a bad imitation of what you expected.
In other instances, fraudsters will lure you into clicking on sponsored links that will direct you to a seemingly genuine website. If you decide to buy from there, you won’t benefit from any protection or services that legitimate websites offer.
If a site or offer stands out dramatically from the rest, there’s likely something off.
Tips to protect yourself
- Buy from companies or individuals you know by reputation or from past experience
- Never make a deal outside the auction site
- Beware of sellers from far away or that have limited or no reviews
- Use a credit card when shopping online; many offer protection and may give you a refund
- Be wary of websites that contain spelling mistakes and grammatical errors
Sale of merchandise scams
When selling items online, it’s important to be careful who you are selling to; as there is a risk of being targeted by fraudsters who want to take your merchandise, money, or both.
In one version of the scam, the fraudster will agree to buy your item without seeing it. You’ll get a PayPal or email money notification that claims the payment is pending.
The catch is, the notification will say the payment will only be released when you provide a tracking number for the goods. By the time you enter the tracking number, you’ll have already shipped the merchandise only to learn that the payment notification was a fake.
In other cases, you may get paid with a fake money transfer, a fraudulent cheque, or a stolen credit card.
In another version, the scammer may send you a message that says the payment can’t be sent due to a problem with your PayPal or bank account. You’ll be asked to pay a fee to obtain a business account to complete the transaction. The scammer offers to pay the fee if you reimburse them using a transfer or wire service. If you agree, the “fee” money will go to the con artist.
Tips to protect yourself
- Try to meet in a local, public, and safe place to complete an exchange
- Beware of generic emails with bad grammar
- Beware of far away buyers who want to buy products or other items without seeing them
- Verify the sender’s email address—scammers will often create addresses that are very similar to legitimate ones, with just one or two different letters
- Never send money to get money
Emergency frauds usually target loving grandparents, taking advantage of their emotions to rob them of their money.
The typical scam starts with a grandparent receiving a phone call from someone claiming to be their grandchild. The “grandchild” goes on to say they’re in trouble—common misfortunes include having been in a car accident, getting locked up in jail, or trouble returning home from a foreign country—and they need money immediately.
The caller will ask you questions, getting you to reveal personal information. They’ll also swear you to secrecy, saying they are embarrassed and don’t want other family members to find out what’s happened.
One variation of this ploy features two people on the phone, one pretending to be a grandchild and the other a police officer or lawyer.
In other cases, the scammer will pretend to be an old neighbour or a family friend in trouble.
Tips to protect yourself
- Take time to verify the story. Scammers are counting on you wanting to quickly help your loved one in an emergency
- Ask the person on the phone questions that only your loved one would be able to answer and verify their identity before taking steps to help
- Never send money to anyone you don’t know and trust
- Never give out any personal information to the caller
What to do if you get scammed
If you are a victim of fraud, reduce the damage by reporting the scam. The Canadian Anti-Fraud Centre (CAFC) estimates that less than five per cent of fraud victims file a report, and encourages anyone who believes they or someone else has been targeted by a scam to call the CAFC at 1-888-495-8501 or report it online at www.antifraudcentre.ca.
Remember, there are no guaranteed get-rich-quick schemes – the only people who make money are the scammers. If you think you have spotted a great opportunity, get independent advice before making a decision, especially if an offer involves money, personal information, time or commitment. Do your homework and check the credentials of the company you are dealing with before handing over money, personal information or before you sign anything.
Written by Salina Shariff, Financial Wellness Leader at People Corporation.