Financial scams - what to watch for when banking
This article is the second in a series of four, examining how various types of fraud and scams are coming after us every day.
By Nikita Mohile
No one wants to be scammed out of money, yet it happens to thousands of Canadians every single day. Financial fraud comes in many forms - impersonation scams, job scams, account takeovers, and scams targeting small businesses.
"The bottom line for scammers is that they're trying to make money," Andrew Dickson, director of Fraud Prevention, Awareness, and Education at the Canadian Bankers Association (CBA), told the Cosmos.
In 2024, Canadians lost over $6 million to the bank investigator scam. This is an impersonation scam, where scammers claim to be investigating bank fraud and persuade victims to provide card or account details. They typically ask for sensitive information by phone, text, or email, ask you to click a link, request login details or remote access, threaten to close your account, or pressure you to act quickly.
"There are many things scammers do that banks never do," says Dickson. He says if you get such a call, hang up and call the number on the back of your bank card.
Scammers also use AI videos and fake posts to mimic celebrities endorsing high-return trading platforms. Victims depositing money may get locked out of their accounts, losing their investment.
"When you're looking at celebrities or personalities, check their socials and websites. A lot of the time, they will post a warning that their image is being used," says Nathalie Bergerson, vice-president of Media Strategy and Communications at the CBA. For more information, the CBA's website has guidance on spotting AI scams.
In job scams, victims receive no-interview offers promising a high income or pay rate. They might then be instructed to forward packages or use their bank accounts to move funds. When this happens, the victim has passed on the scammer's money, unwittingly concealing its source and aiding in money laundering.
Account takeovers occur when cyber criminals gain access to online accounts, impersonate owners, and carry out unauthorized transactions.
"Even small suspicious transactions should be reported," says Dickson. "If you don't notice or report it, they will move with larger sums. It's best practice to keep track of transactions," adds Bergerson.
Card-present fraud occurs when the physical card is used, often through card skimming. This happens when a skimmer (a device that can capture card information) is attached to a debit/credit card machine.
"To avoid that, you should always check and wiggle the card machine a little bit," recommends Dickson. Reporting lost or stolen cards quickly can also prevent fraud.
Card-not-present fraud can happen when entering card information into a fake shopping website, often with a masked URL. "When browsing online, check if the website is legitimate. Spoofed sites can trick you, but the domain won't be exact," says Bergerson.
Scammers can also target small businesses using fake invoices, overpayments, and other scams. It's important to train employees to recognize such scams, work with IT professionals, and use appropriate security tools and anti-fraud tech.
If you suspect a scam of any sort, the CBA advises pausing, thinking, and checking before giving out information. A legitimate bank will also be fine with you hanging up the call and calling back the official phone number. To avoid scams, other tips include using strong passwords, avoiding public Wi-Fi for banking, enabling multi-factor authentication, updating device operating systems, and staying informed.
To learn more about banking fraud, Interac offers tips on its website to prevent e-transfer scams and other types of payment scams. Most banks' websites provide information on banking scams, and the CBA provides free fraud prevention toolkits for seniors, newcomers, students, and small businesses.
In the next article the Cosmos will discuss social media scams.