Whether you’ve received a fake call from someone claiming to be an employee of the Canada Revenue Agency or someone claiming you’ve won a prize to be claimed, most people have been targeted by financial scams.
A financial scam is a deceptive scheme intended to get the targeted individual to divulge personal or financial information in an attempt to steal money or convince them to send money under false pretenses. By being able to spot the signs of a financial scam and knowing some commonly used ploys, you’ll be better shielded against their arsenal of tricks.
Stay one step ahead of fraudsters by familiarizing yourself with the common financial scams below.
Bank investigation scam
A fraudster calls pretending to be a financial institution representative, often claiming to be investigating a theft or fraud committed by an employee. The targeted person is asked to participate in the investigation by transferring funds using their personal bank account. Learn more about investigation scams and how to protect yourself against them.
Prize/inheritance scam
This could be an email, text or phone call claiming that the targeted person has won a prize or received an inheritance to be claimed. Fraudsters may request to transfer funds to pay taxes or fees in order to claim the prize or inheritance. They may also request personal information that can be used to gain access to financial accounts.
Emergency scam
A fraudster claiming to be (or seeking assistance on behalf of) a grandchild or other family member contacts the targeted person asking for funds to be transferred immediately due to a financial emergency. Common reasons include requests for bail money after an arrest or funds for medical treatment related to an accident.
Service scam
An unsolicited phone call or on-screen pop-up message on the targeted person’s computer may come from a technology or software company advising of security, warranty or other computer-related issues. These types of messages often ask the targeted person to call a specific number for assistance. The fraudster will then claim they need to fix these issues remotely and will take over the targeted person’s computer to gain access to personal or financial information.
Romance scam
A fraudster sends a friend request through social media, dating website, or dating app and spends time communicating with the targeted person to build a trusting relationship. The fraudster will then fabricate a financial issue and persuade the targeted person to assist by sending money.
Canada Revenue Agency (CRA) or tax scam
A fraudster pretends to be a representative from CRA claiming the targeted person is owed a refund, or that money is owed to CRA. The goal is to appear as if they are a trusted authority and get the targeted person to share critical information that can be used to steal money or transfer funds directly to the fraudster.
These are just some of the common ways fraudsters try to swindle people financially. To learn more about types of financial scams, visit the Government of Canada’s The Little Black Book of Scams 2nd edition.
By staying informed, you can avoid getting caught in a web of deceit weaved by fraudsters. Staying one step ahead of these scam-artists by recognizing the warning signs will make you less likely to fall victim to fraud—and help others do the same. It’s important to think critically about whether a given circumstance or request makes sense. Never disclose information to unverified sources such as your personal identification number (PIN), bank account and credit card details, codes, passwords, personal identification numbers (PINs), and social insurance number (SIN).
At CIBC Private Wealth, we take a comprehensive approach to managing, building and protecting your wealth. If you'd like to discuss these insights in more detail or have questions about your investment portfolio, please reach out to me anytime.