Weekend Reading – Fraud Prevention Month 2023

Weekend Reading – Fraud Prevention Month 2023

Hey Folks, 

Welcome to a new Weekend Reading edition highlighting fraud prevention month 2023.

First up, a few reminders:

Now that your RRSP contribution is done for the 2022 tax year, a reminder that you need to reinvest any RRSP-generated tax refund you get back – otherwise you are losing out on the true power of tax-deferred investing.

I highlighted some key things you need to know about when it comes to the upcoming and new Tax-Free First Home Savings Account (FHSA).

And recently, I published this monthly dividend income update…one of my favourite ongoing series of posts I publish! (I continue to share these income updates not to express any sort of surperior investing approach but instead, share what might be possible for you, for your investing decisions and for you to figure out the best approach to meet your desired financial goals and dreams…)

February 2023 Dividend Income Update

Weekend Reading – Fraud Prevention Month 2023

Sadly, the COVID-19 pandemic triggered a new wave of scammers and criminals who want to continue to take advantage of Canadians – in anyway they can. March is Fraud Prevention Month, but that doesn’t mean every month should be a month to be mindful and vigilant when doing any of your financial business. 

Weekend Reading - Fraud Prevention Month 2023

Image from Sora Shimazaki.

Headlining this Weekend Reading, here are some scams and tips in how to better protect yourself:

1. Buying and selling scams

During the pandemic, people who have never shopped online before started buying groceries on the internet, and much more. Simply put: beware of fraudsters looking to buy goods or services that you are selling online. Fraudsters often contact sellers via email or text with a generic message wanting to buy an item without seeing it. They might claim to be out-of-town or travelling at this point, and the might offer to pay for an item above the asking price. There might be an email message saying the money will only be transferred once a tracking number is provided by the seller. The seller will then ship the product and provide the tracking number to the fraudster. Shortly after, the seller will realize that the payment notification was fake and that no money is available.

Warning signs for any buy-sell scams:

  • Be cautious of blowout sales or greatly reduced prices (for example, 80% off)
  • Watch for odd spelling errors in any email or email address
  • Beware of overpayments for items you are selling
  • Beware of high volume purchases that need to be shipped urgently

2. General financial scams

These could be in the form of grants, loans, jobs or any investments that target your financial hardship.

Warning signs for any financial scams:

  • Any investment opportunities that market higher than normal (i.e., 8-9%) returns
  • Any unsolicited investment offers
  • Investments that signal urgency to buy now, don’t delay, this won’t be offered again, other
  • Investments or loans that offer instant approvals
  • Unsolicited messages offering employment or any jobs
  • Any promise that requires an upfront fee

Learn more tips and tricks for protecting yourself Google our Canadian Anti-Fraud Centre site.

3. Identity theft

Working from home, performing your online banking, and socializing online have all increased in activity since the pandemic but sadly, so has identity theft. These are some of the signs your personal information might have been compromised:

  • Missing bills or essential mail doesn’t show up
  • Suspicious activity on your bank or credit card statements
  • Letters stating that you’re approved or declined credit that you did not apply for
  • Unauthorized applications or accounts on your credit report
  • Creditor or collection agency calls about an application or account you do not have
  • Bills from service providers that you do not use
  • Phishing emails asking you to click on links or open attachments

Here are some good practices:

  • Reject/block unsolicited emails, texts, SMS or unrecognized phone calls; that includes really anything you don’t recognize by a family member or friend 
  • Avoid requests for your social insurance number (SIN)
  • Do not open any email, texts or links that look suspicious
  • Avoid automatic login features that save your username and password that is used for multiple sites
  • Check your credit report at least once a year
    • To get a free copy of your report, contact: Equifax Canada and TransUnion Canada

Learn about your Credit Score 101 here. 

4. Other online scams

Although we’re learning to live with the COVID-19 virus including any related variants, Canadians are increasingly relying on their online networks to remain connected. This presents opportunities for fraudsters who are actively creating fake accounts, profiles and advertisements. Here are some prevalent online scams and warning signs to mindful of:

Romance scams

In romance scams, fraudsters will gain the trust of their victims by carrying on a relationship over a period of time. This can include displays of affection like sending gifts, flowers and tokens to prove that their feelings are genuine. In many cases, the fraudster will claim to be a professional business person or military personnel that are travelling or stationed abroad. Once trust is gained, fraudsters will begin to ask for financial assistance for reasons like urgent situations (e.g. a sick family member or to complete a business transaction) or to return to the country (e.g. plane ticket, lawyer fees, or duty & taxes).

Immigration scams

From ads offering guaranteed work permits and high paying jobs in Canada to websites that offer services to expedite your immigration application, fraudsters are using Canada’s good reputation to scam people looking to come to Canada. Victims will be asked to pay high fees via Money Service Businesses like Western Union or MoneyGram, e-transfer, Visa or prepaid gift cards in order to process an application for visas and/or work permits. Once money is sent, the fraudster ends contact with the victim.

Warning signs for other scams:

  • Criminals want to meet in person but cancel or they have an excuse and want some online compenstion instead
  • Fraudsters want to develop any quick relationship with you
  • Be cautious of an individual that claims to live close to you but is working overseas or now travelling often
  • You are asked to pay to access immigration forms and guidance, or to deliver a service
  • Any website offers to fast-track your processing time – including the provision of a deposit before you even start the application process
  • You must provide credit card information to register for a free trial.

Here in Ontario, to support you during Fraud Prevention Month (or any month!) we have a great resource to check out among others: GetSmarterAboutMoney.ca.

Visit them on Twitter at @smarter_money.

This entire site is managed and maintained by our Ontario Securities Commission.

For all Canadians, check out The Financial Consumer Agency of Canada site. That department has a mandate to help protect the rights and interests of all consumers overseeing all financial products and services. It supervises federally regulated financial entities, such as banks, and strengthens the financial literacy of Canadians.

Visit them with a comment or thought on Twitter @FCACan.

More Weekend Reading – Fraud Prevention Month 2023

Negative amortiziations? Yup. It’s happening…

In this Globe and Mail article (paywall) I read about some of the major distress that some homeowners are now deeply feeling with higher interest rates. According to some recent data:

“Twenty per cent of Canadian Imperial Bank of Commerce mortgage holders are seeing their loan balances grow, as rising interest rates make it harder for them to pay off their homes.”

A few years ago, I wrote about our plan to deal with higher interest rates (when they were lower). I’m very happy I ate my own cooking. 

I was travelling for work this week and during some work activitites with my colleagues, it got me thinking about this – the simple art of writing things down for our team. That also applies to part of the reason why I run this blog, share what I know (and don’t) – there is power, accountability and action when it comes to writing things down.

Good thinking is expensive. Bad thinking costs a fortune.

One way to force yourself to think is to write. 

Forcing yourself to make your thinking visible gives poor thinking nowhere to hide. You can’t simply take a few minutes here and there, get the gist of the problem, and expect to have clear writing. It doesn’t work that way.

Good writing, like good thinking, takes time.

A tiny but important thought from the @farnamstreet Brain Food newsletter in March 2023.

Dale Roberts wrote about the recent Canadian bank earnings as part of his Sunday Reads.

Speaking of earnings and money, Ben Carlson wondered what income level makes you rich in the U.S.?

Here are 25 golden rules for investing with thanks to Peter Lynch and Dividend Growth Investor.

Stay mindful, vigilant and well this weekend.

Have a great weekend!

Mark

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

10 Responses to "Weekend Reading – Fraud Prevention Month 2023"

  1. Hi Mark: I’ve had some emails that look fishy also. Usually from Amazon and Pay Pal. They say that my order of three lap tops have been sent to an address in New Jersey and thank me for the order. I have seen this as some kind of game and have deleted it. Also you’re right when you say that small things matter. Every year some of my dividends rise and my net worth increases without me buying anything. The power of compounding. This year you could increase it though. The market is slowly dropping and BCE, TRP, and BNS are all dropping into a range one could buy. Five and ten years out they will be higher. On another newsletter the person running it sort of apologized for their recommendation of SVB Bank Financial. I for one would never buy the company and he said it was a good company that was badly managed. They had a flood of cash and invested it in fixed rate instruments when rates were low and then rates rose fast and investors wanted their money and the bank didn’t have the money so is no longer a good buy as the FED had to step in.

    Reply
    1. Ya, never bought or even considered SVB Bank. Canadian banks only for me and I also diversify away from them via other stocks in other sectors. BCE, TRP and a few other stocks are at decent prices now and I will be buying more stocks this spring and summer for sure. That should push my projected annual dividend income even higher.

      Have a great weekend, Ronald!
      Mark

      Reply
  2. I consider myself to be fairly internet savvy but still managed to get hooked in Feb for a credit card scam.
    Don’t think I was stupid for having fallen for it but I don’t think I was very smart to not have seen through it either.
    Luckily the bank caught it before any damage was done.
    They locked the card down for all internet transactions but did let me use it while I was on a trip (no more vacations since I retired). The card was OK to used physically in store by tapping or pin #. Once I got back I changed the card.
    The reason I got caught was I was waiting on a postal delivery and got an e-mail saying it could not be delivered and to re-schedule I had to pay $1. Was re-directed to a site that looked like Canada Post but obviously wasn’t. An obvious scam in hindsight. Canada Post may notify you but they will re-direct the mail/package to a pickup site with NO CHARGE.
    What I find funny is that the scam was sent when I was awaiting a package. Makes me wonder if someone some how is reading e-mails and setting you up.
    Sister-in-law also got an e-mail the other year when she was conversing with her sisters about some financial arrangement. They wanted her to send money to her “sister” at a fake address.
    As I said, in hindsight I fell for it

    Ricardo

    Reply
  3. I will quickly add one note here:

    Do not open email or links in any email that look suspicious

    Please add SMS / text message to this warning. I find they are getting very creative and I’ve almost clicked these a couple of times.

    Reply
    1. Just after I posted my scam “experience” I got a text saying I had $600 from Rev QC awaiting deposit to my bank account. Good time of year to start up these scams as probably quite a few have already filed their statements,
      A few factors to consider. 1) I have direct deposit with the Revenue dept. 2) The text message came for a 780 area code which is in Alberta so that is a NO-NO
      So As per James message, they are getting creative and will try anything.
      If they get one bite in a thousand messages then they are more than happy.
      Keep your guard up.

      RICARDO

      Reply
  4. Great post, Mark. I really appreciate you bringing attention to Fraud Prevention Month. I think what’s overlooked is just how much fraud impacts our more vunerable populations, especially our elderly.

    My grandma is a perfect example. She is regularly targeted by scammers who call her land line at 6 in the morning claiming to need her credit card for a medical emergency or to bail her grandchildren out from prison. Usually they call so early because that’s when you’re likely to be most disoriented or confused. Doubly so if you’re sick or had a hospital stay.

    I wish the gov’t would take it more seriously. Our whole telephone system needs to be overhauled. Something like implementing a list of trusted callers or having some other type of authentication. This type of fraud costs Canadians tens of millions every year.

    Reply
    1. Very much so, so many vulnerable folks taken advantage of and exploited. Yes, the entire system should be looked at. The cost of financial fraud is staggering…

      According to an article I read, Canadian financial services firms saw the cost of fraud jump almost 20% between 2020 and 2022, with every dollar lost to fraud actually costing them $3.78 ($3.74 for mortgage and lending firms). For US firms, the cost rose 16% to $4.23 ($4.08 for mortgage and lending firms).

      https://www.wealthprofessional.ca/news/industry-news/cost-of-fraud-has-risen-sharply-for-canadian-financial-firms/371580

      The impact to consumers is massive.

      Sorry to hear about your grandma, totally unacceptable and criminal!

      Take good care,
      Mark

      Reply

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