Fraudsters continue to find new ways to access your money. To circumvent the latest security measures, they are willing to use any tool they can. Whether by phone, email, or social media, their ultimate goal is to extort money, especially from the elderly, and commit financial abuse. It’s important to be able to recognize the warning signs to successfully protect yourself from financial exploitation.

What are the financial fraud techniques?

1. Fake Representative Scam

The phone rings. The caller says they’re a customer service representative or fraud investigator from your bank. They claim your bank account has been compromised, a new card has been issued to replace the “fraudulent” one, and they need your PIN to confirm your identity. They recommend dropping your debit card in your mailbox so it can be safely recycled. A few hours later, they take your card and make withdrawals. They may also tell you that to protect your account, you need to send yourself a wire transfer. They will guide you through the process, often increasing your daily limit to $10,000. Once you send the wire transfer, they will ask you for a code – the last part of the wire transfer link. With this code, the fraudsters can access your money and transfer it to their accounts.

2. Love Stratagems

Rather than selling a product or service, the scammer seeks to build a friendship, and possibly a love relationship, with their victim. This is a long-term strategy that will eventually translate into a fraudulent request for help. The classic scenario goes like this: the fraudster spots a vulnerable person, connects with them, and slowly builds a relationship of trust. Through social media, scammers can learn a lot about you. They can check out your interests, read your posts, and decipher your wants and needs. They spot single people and exploit their vulnerabilities, which is why it’s important to adopt good cybersecurity habits.

Once trust is established, the fraudster strikes. They will devise a ruse and pretend to need help. They may claim to be struggling financially and ask you to send them some money to supplement their income. Taking advantage of your generosity, they may also tell you that they would like to meet you in person, but need money to travel to you. Fraudsters can also use the trust they’ve built with you to trick you into investing as much as possible in a unique opportunity with incredibly high returns, often involving cryptocurrency trading platforms. This scam is often called “pig butchering” because the goal is to force you to make larger and larger investments, thereby increasing the final sum.

3. The distressed loved one scam

Also known as the grandparent scam, this type of fraud aims to trick a vulnerable person into making an urgent financial transaction to help a loved one in distress. It plays on feelings, family ties, and, most importantly, guilt. The fraudster contacts an elderly person by phone and pretends to be their grandson or granddaughter. They avoid saying their name, leaving the other person to guess. As the conversation progresses, they convince their victim that they are indeed a family member. The most common scenario is: “I just had an accident and I’m going to need a lawyer. I don’t want Mom and Dad to find out. That’s why I called you. I need $5,000 by the end of the day, or I could go to jail.” If the victim responds positively, he asks his victim to deposit a sum of money into a bank account, pretending it’s the lawyer’s trust account. This scam plays heavily on urgency to get the victim to comply.

4. Telemarketing scam

With this scheme, cybercriminals contact a person to get them to complete a transaction remotely. A few years ago, contact was primarily made by telephone. But today, telemarketing scams can be carried out via email, text messages, or any other communication medium. Consider the following example: You receive an unwanted call. An automated voice congratulates you on winning a cruise to the Caribbean. For a fee to guarantee your spot, you could set sail as soon as the situation permits. The problem? You’ve never entered a contest to board a cruise. In good faith, you’re tempted to enter into the transaction. However, this is a common fraud technique that would cost you the most.

How to detect attempted fraud?

Several signs can indicate that a malicious person is trying to defraud you:

Is this an unsolicited communication

Did you expect such a person to contact you? In the case of an organization, are you being called outside of normal business hours?

Do you feel a sense of urgency?

Cybercriminals are trying to unsettle you, play on your emotions, and pressure you into acting rationally.

Is the lure of profit excessive?

In other words, is the return on investment too good to be true? Take the example of inheritance fraud, where a scammer contacts you claiming you’ve been chosen to help settle a multi-million dollar estate.

Is there an element of confidentiality surrounding the transaction?

Fraudsters insist that you keep the situation secret to avoid consulting your loved ones, who would dissuade you from taking action.

Finally, if the person you are talking to is pretending to be a business, organization, or financial institution, is this person using the usual method of communication? Remember that your communication preferences are recorded with the organizations you deal with. For example,

Revenue Canada’s website states that they generally use postal notices of assessment. If they contacted you by phone, be aware that they would not use aggressive or threatening language. Nor would they leave ominous voicemails asking you to provide personal or financial information.

How to protect yourself against financial fraud?

Cybercriminals are actors, in a way. They’re prepared; they know how to play the game to exploit your good faith. To protect yourself against bank fraud, doubt is your best asset: don’t hesitate to ask questions. Increased vigilance will help you more easily detect this play-acting. You can then take the necessary steps to protect yourself.

In customer contact protocols, large organizations never ask for information like your Social Security number or PIN

If you’re asked, hang up immediately. If the call is truly important, the caller will return the call and leave a message with their contact information. In the meantime, you can check in or discuss the situation with someone you trust.

Be interested in all the details surrounding the transaction in question and avoid agreeing to anything during the call

Instead, ask for the documentation to be sent to you in writing, claiming you need time to think it over. Have you been asked for your address? This is another sign that it could be a scam if the person you’re talking to is expected to know it.

Never answer a question to which the other person should already know the answer.

For example, don’t give them a name before they can identify themselves first. Don’t be afraid to offend them by saying that you don’t recognize them and would like them to give their name.

Along the same lines, don’t disclose sensitive information that your contact should already have access to

Your financial institution wouldn’t call you to ask for your date of birth, your social security number, or your bank card PIN. Ask yourself why your contact would want to obtain this personal information.

Verify the legitimacy of any call yourself.f

You may want to contact other family members if you suspect you may be a victim of the distressed relative’s scam. If the call is supposedly from your financial institution, you may want to contact them using the contact information on the back of your credit card.

Finally, if a stranger calls you congratulating you on winning a contest, be wary

Is this a contest you entered? If you have any doubts, ask the caller for more details, such as the organizer’s contact information and where to get more information to validate the contest’s legitimacy. If the claim process involves paying a fee, that’s a red flag. Remember that Canadian law governs promotional contests. You can also report any incidents of fraudulent contests to this organization: Competition Bureau.