Fraud to look out for in 2024

Late one night, my mother, Kathy, was startled by a phone call from “private name, private number.” Now, she is accustomed to viewing situations with skepticism, owing to 85 years of street smarts. But my brother Randy’s calls usually appear as “private,” so she answered, wary of trouble.

“Mom, it’s your son, Randy,” quivered the caller. “I’ve been in a terrible accident; I need your help.” 

Mom’s heart raced, but she stayed cautious. “This doesn’t sound like you, Randy,” she said. “Why do you sound odd?”

“Oh, Mom,” replied the caller, “I broke my nose; that’s why I sound different.” 

Mom hesitated momentarily but stuck to her instincts. “That’s not you, Randy,” she said. “I’m calling you myself!” 

Click — she hung up.

Hats off to you, Mom!

A growing problem

My mother evaded a scammer this time, but she’s just one of many Canadians who are targeted every year with some form of scam or fraud. It’s a pervasive challenge. 

According to Canadian Anti-Fraud Centre (CAFC) data, as of September 30, 2023, the tally of reported fraud complaints for the year stood at 49,074. There were 31,758 victims, with a total monetary loss of $404.2 million. 

However, these statistics are just the tip of the iceberg: a mere 5% of victims (as opposed to people who just call in to report a scam) are estimated to report fraud incidents.

Fraudulent activities and scams often exhibit recurring patterns, yet fraudsters constantly evolve tactics to ensnare unsuspecting individuals. By being aware of the common threads that tie these schemes together, you’ll be equipped to spot and avoid fraudsters’ efforts. In this article, we delve into three scam encounters and provide insights to help you identify some of these common schemes. 

1. The grandparent/extortion scam

Grandparent scams, like the one my mother narrowly evaded, play on emotions and create a sense of urgency. In these schemes, scammers impersonate a grandchild in distress, often claiming to be in legal trouble, stranded, or needing urgent financial help. They contact elderly individuals, exploiting their emotions and trust to extort money or gain sensitive information under false pretenses, preying on their concern for their supposed grandchild’s well-being.

These tips can help you assess suspicious calls and stay safe.

• Verify calls independently: Regardless of the caller ID, exercise caution. Fraudsters often use spoofing technology to imitate trusted entities. Always verify their identity independently by hanging up and then calling back the supposed sender or institution using official contact details.
• Listen to voice authentication doubts: Be cautious even if the voice on the other end seems familiar. Advancements in AI technology allow scammers to manipulate and replicate voices convincingly. Always confirm the caller’s identity by asking personal questions only the real individual would be able to answer.
• Initiate direct contact: If the caller claims to be a loved one in distress, hang up and dial them directly using a known phone number. Confirm the situation or check if they indeed made the call.
• Guard personal information: Never disclose sensitive data like your full name, address, date of birth, Social Insurance Number (SIN), banking details, or any financial information over the phone, especially to unsolicited callers.
• Stay calm and cautious: Despite urgent pleas or high-pressure tactics, maintain your composure and stay skeptical. Fraudsters thrive on panic and fear, aiming to extract information or money quickly.

2. The job scam

Scams can be sly, right? Even though I usually watch my back online, a recent surprise made me think twice.

Out of the blue, I got a LinkedIn job offer. I wasn’t job hunting, and I never hinted at it online. The recruiter seemed legit, with many mutual LinkedIn connections. Then came the $120,000 consulting gig offer. It seemed too good to pass up — until the red flags waved.

They wanted me to contact a company in South Asia for the job details. I got the job description, but it was sketchy, full of typos and very vague. The job? Playing financial middleman between a Chinese pharmaceutical company and Canada. The fraudsters’ proposal was that I was to act as a clearing agent, promising reimbursement for covering brokerage fees for financial transactions. However, the sketchy details, typos, and the promise of easy, regular returns raised my suspicions. I smelled a scam and didn’t bite. I recognized the hallmarks of a scam to exploit individuals by convincing them to front fees with the false promise of reimbursement. 

Lessons learned from my LinkedIn job scam

These tips can help you spot warning signs and protect yourself from falling for job scams. Always be vigilant and research thoroughly before accepting any job offers, especially if they seem suspicious or too good to be true.

• Research the company: Thoroughly investigate the company offering the job. Search for reviews, check their website, and verify their legitimacy through reputable sources like the Better Business Bureau.
• Question unrealistic offers: Be wary of job offers that seem too good to be true regarding salary or work requirements. Unrealistically high pay for minimal effort could indicate a scam.
• Verify contact information: Check if the recruiter or company providing the job offer has a valid website, email domain and contact details. Legitimate companies often have an established online presence.
• Trust your instincts: If something feels off or the job description seems vague or unrealistic, trust your gut. Scammers often use pressure tactics or create urgency to manipulate potential victims.
• Avoid upfront payments: Be cautious if the job requires you to pay money upfront for supplies, training, or other expenses. Legitimate employers typically don’t ask for payment from employees as a condition of employment.

3. The pig butchering scam

Glenna Smith is the Managing Director of Smith Compliance Consulting and a financial crime guru specializing in anti-money laundering. One night, over wine, her friend Sam told her about a message he had received on WhatsApp. It was from an unknown number, asking, “How are you?” Curious, Sam responded, sparking a friendly conversation that continued over time. Gradually, a bond formed.

Crafty scammers don’t ask for money outright; instead, they propose an unbeatable investment opportunity. The so-called “pig-butchering scam,” in which a victim is “fattened up” before they are robbed of their savings, is one such scheme. 

In this case, Sam “invested” $200 and, over weeks, he would check in on the website he was provided and watch that investment grow rapidly. Excited, Sam added more money, and then some more. But it wasn’t a legit opportunity at all — it was a fake site that only made it look like Sam was growing his wealth. As soon as he tried to withdraw the funds, he realized it was all a scam. His money was gone, as was his WhatsApp pal. 

“The pig butchering scam targets individuals on social media by using fake profiles or false pretenses to send a message,” explains Smith. “Scammers build trust by taking their time and then persuading victims to invest in their fake cryptocurrency platforms, promising wealth before exploiting and absconding with all their money.” These types of scams cause tens of billions of dollars in losses worldwide. Unfortunately, the scammers can also be victims — people coerced into cyber scam operations. 

Lessons to learn from the pig butchering scam

Unsolicited messages are a great way for scammers to contact you and build a rapport before making their pitch. Here’s what you need to know to avoid this popular grift. 

• Beware of generic messages: If you receive a vague message like “Hi. How are you?” from an unknown number, take action. Delete the message, block the number, and return to your regular activities.
• Be wary of scripted language: Scammers often follow scripted manuals, honing their language to manipulate and effectively target victims. They adapt their approach based on various scenarios.
• Report suspicious activity: If you encounter such messages or suspect a scam, report it immediately to local law enforcement. Prompt reporting can help prevent others from falling victim.
• Stay alert, stay safe: Even professionals, bankers and law enforcement officials have been duped by these convincing scams. Don’t feel embarrassed. These scammers are adept at deceiving people from all walks of life.

4. Account takeover scams

Two-step authentication (also known as one-time password, or OTP) sends a security code to a person’s phone as an extra layer of security when they’re logging in. However, if a fraudster has obtained the victim’s login credentials, they may try to beat the system by calling the victim and asking for the security code.

“Consumers inherently trust their institutions,” notes Rachel Topalov, Director of Fraud Strategy and Governance at Tangerine. A fraudster trying to gain access to personal login details may ask for a security code under the guise of a trusted institution. Once they have it, the fraudster can use the code and acquired credentials to secure unauthorized access to their accounts.”

When it comes to AI and new technology, Topalov cautions that voice recognition software previously used for identity verification by some banks is getting less reliable. She advises you to become familiar with the other identity verification methods banks use during calls. “Banks need to diversify authentication measures these days because no one method is foolproof,” Topalov says. 

Tangerine, for instance, incorporates voice verification: Clients’ recorded voices are used (with their consent) for authentication. However, fraudsters can use AI to replicate Clients’ voices, creating convincing fakes and undermining voice verification tools. So, Tangerine augments its security with supplementary authentication, such as verifying PINs, alongside voice verification. Be sure to visit Tangerine’s Security Centre for the latest information.

Tips for preventing account takeover scams

Topalov offers these fraud prevention tips:

1. Regularly monitor Account activity by reviewing statements and transaction history for unusual or unauthorized transactions.
2. Activate alerts to receive notifications for Account activity, such as large withdrawals. Always exercise caution and don’t blindly trust caller IDs in Account-related calls.
3. Use strong, unique passwords and PINs and keep 2-step authentication active. Be cautious about sharing sensitive information over the phone without independently verifying the caller’s identity.

5. The Canada Revenue Agency scam 

Don’t you love that feeling when you’re doing your laundry and you find an extra $20 in your jeans that you forgot about? What about a text telling you that you have an unclaimed cheque for $2,000 from the Canada Revenue Agency (CRA) waiting for you? How much would that news make your day? That’s exactly what happened to Abdul. 

“I heard recently that the CRA was notifying millions of people that they had unclaimed cheques waiting for them. I was so excited to receive the text. I actually really needed the money. But as I looked closer at the text, it looked fishy to me. I headed over to my account on the CRA website, as I heard that they list if you have money owed to you or not. When I logged in, I found out that I wasn’t owed anything and I’m really happy I didn’t click that link!” 

There’s at least a kernel of truth here. You may in fact have an uncashed refund cheque. You can find out for sure simply by logging into your CRA account. 

Lessons learned from Abdul: 

• He absolutely did the right thing! Never click a link, attachment or request for your personal information to get unclaimed money or any other offer. This could give a hacker access to your computer, contacts, and potentially your personal information. If you’re unsure whether the message is legit, go to the organization’s website yourself (not by clicking the link provided) or call the organization. 
• The CRA will never call, email or text you notice of a refund. Your provincial government, municipal government and financial institution won’t either. Legitimate notifications come in the mail. When in doubt, call them directly. 

6. Phishing scams 

It was 5:45 p.m. on a Friday before a long weekend filled with fun family plans when Joyce got an email from her bank saying that her account was going to be locked down. 

“I just about freaked! My heart sank. I couldn't have my accounts shut down. I had a weekend of activities planned with my partner and the kids. Why would they send an email like that? I of course acted fast and did as they told me. In hindsight, the website seemed a little odd, because I usually have my bank card saved on my browser, but I only had until 6 p.m. to get this corrected. I panicked. I'm scared now because I know it was a fake website and I don't know what information they have or what I should do!" 

Lessons to learn from Joyce: 

• Scammers are super sophisticated today, so don't blame yourself if you fall prey. It can literally happen to anyone. The fraudsters used a time crunch and a long weekend to scare Joyce into clicking their request. If she worried about being locked out, the best action would have been to go directly to the bank's website to log in (not using the link provided) or to call them. But who can blame Joyce? 
• Now Joyce needs to act quickly to do any damage control before the fraudsters use her information to apply for credit in her name, open accounts, try to file her taxes to get her tax refund or more. 
• Joyce should immediately contact all of her financial institutions and let them know that she accidently gave her personal and financial details to a would-be fraudster and get advice on the best next steps to take. It's always a good idea for her to immediately change all of her online passwords and PINs. She should also notify Equifax and TransUnion – the two credit bureaus in Canada – that she's a potential victim of fraud. They'll both put fraud alerts on her file to protect her from someone applying for credit in her name. 

Stay safe

In Canada, fraud is a pressing concern, with reported cases revealing only a fraction of the problem. Through real-life stories, we’ve highlighted how fraudsters exploit trust in institutions and use evolving tactics like intercepting security codes to access sensitive information. 

It’s crucial to stay vigilant: monitor your accounts, activate alerts for changes, and fortify your security measures. Be cautious with caller IDs and avoid sharing sensitive details over the phone without verifying the caller’s identity. Understanding these tactics empowers you to defend against evolving threats, safeguarding your finances and identity in the digital age.