The number and sophistication of scams has risen dramatically recently. It seems that each day brings a new call, text or email arrives to help fix a problem or offer an opportunity. Artificial Intelligence (AI) has also increased the level of creativity of methods used by fraudsters.
If it seems too-good-to-be-true, or an unbelievable problem, it probably is. A “get rich quick” scheme or a family member in grave trouble both rely on igniting emotion, not rationale. Each scammer can make hundreds of calls each day, and each gang can make thousands of calls daily. A low degree of success makes these criminal enterprises very lucrative.
Canadians have been a disproportionately large target because of our relative wealth and our inability to prosecute sophisticated criminal organizations in foreign countries. Expect this trend to continue, and diligently doubt unsolicited opportunities to make money or help family.
What You Need to Know
Most scams rely on gaining someone’s confidence, and then using it against them. The term “con-man” is derived from the word confidence. Fraudsters also rely on a victim’s shame of being duped to delay or avoid reporting their loss to family members or police. A list of existing scams becomes obsolete as soon as it is completed since criminals invent new methods continuously, but here are some popular ruses:
- Family Emergency - A scammer preys upon a parent or grandparent’s need to help after an accident or a serious offence, like a DUI, has occurred. Medical bills, a fine, or bail “must be paid immediately.” The thought of a loved one in pain or prison stirs the soul. Scammers can access email, phone IDs, social media accounts illegally to build their legitimacy. They use private and confidential information to confirm the identity and relationship and use urgency as a tool. Scammers can now use AI voice tools to mimic the family member to build credibility that the situation is real. If this occurs, call back on the official number of the hospital, police, or on the family member’s phone. Be especially careful when urgent action is necessary.
- Technology Trouble - A fraudster poses as a benevolent and expert computer technician informing the potential victim that their computer, laptop, or tablet has been infected with a virus or malware. The fraudster wants control of the device remotely.
- Confirmation of Credit Card - Posing as a staff member from a well-known and reputable company, like a utility or bank, informs the potential victim of an irregularity with their account. To fix the problem, the victim is asked to provide confirm credit card details.
- One-Time Offers - Widely used services, like duct cleaning, window washing, lawn care, HVAC maintenance, are offered at a bargain price if they are purchased immediately. Most reputable firms ask for payment following satisfactory completion of work.
- Contests, Prizes, Giveaways – An unsolicited call for anything that is “free” that arrive electronically or by phone fall into the too-good-to-be-true category.
- Phishing Schemes – Scammers are fishing for data with an electronic prompt (text, email, social media, online) and encourage the recipient to click-thru. The “click” could imbed malware onto the device or quickly require name and payment to receive a tantalizing coupon, offer or subject-matter.
- Fake Websites – Fraudsters build a poor copy of a legitimate website, where it does not look or function properly like it has in the past. The site has been commandeered by fraudsters, and payment information and personal details are collected unnecessarily.
- Threats of Extortion – A claim that confidential information has been captured by fraudsters and payment is necessary to prevent exposure of the data, images, or videos.
Investment advisors do not accept instructions through electronic communication because emails, social media accounts and texting apps can be hacked and commandeered by scammers. Advisors need to verify that it is actually their client before undertaking actions. Everyone should follow the same practice of verification, because:
- Canada Revenue Agency (CRA) does not accept gift cards or credit cards for payment
- CRA contacts taxpayers by letter using Canada Post
- People unknown to you do not need your credit card information
- Your credit card number is better than cash to a fraudster
- Once a fraud has been committed, it is almost impossible to reverse the loss
The Bottom Line
A question many people express during and after a scam has been used against them is, “why would they do such a thing”. The answer is simple; scammers are criminals who would rather cheat and steal than work for it themselves.”
If you have something of value, like cash or investments, someone somewhere wants it. Be wary, be diligent, and if you are unsure or surprised by a request bring a trusted friend, relative or advisor, like me, into the conversation.
If you experience or fall victim to a scam report it to the Canadian Anti-fraud Centre to protect yourself and others. Call (888) 495-8501 Monday to Friday, from 9 am to 4:45 pm (Eastern time).
