Let’s take a look at what to watch for, latest scams and how to keep you and your clients safe.
Most of us have had a fraudulent approach be it a request for Emergency Help for a family member or friend, a duct cleaning deal, a Canada Revenue Agency collections call, or an email about duty overdue on a package.
Not surprisingly 43% of us and our at risk clients and colleagues have been victims of a scam or a fraudulent activity.
Being taken by a fraudster can jeopardize not only the financial stability and security of your clients but also their mental health and well-being. As health professionals, our role is often to educate, advise and protect our clients.
This article aims to arm you with a few of the basics that will arm you with tips and tools to detect and prevent fraud. We will cover the most common types of fraud, crucial warning signs, and effective strategies to help you and your clients navigate these challenges with confidence and security.
Fraud can take many forms, ranging from identity theft and phishing scams to more complex financial frauds like investment schemes and cybercrime. Here’s a breakdown:
• Identity Theft:This is when someone steals personal information. It usually begins with a data breach where sensitive details are taken/obtained and misused for illegal activities.
• Phishing Scams: Using sneaky emails or messages that look like they’re from trusted sources criminals trick people into giving up passwords, pay false bills, send credit card numbers and sign up for “memberships”.
• Investment Fraud: This includes Ponzi or multi-level schemes or fake investment opportunities designed to deceive people who are vulnerable with promises of amazing returns.
• Cybercrime:With the use of technology increasing and evolving, cybercriminals are finding more advanced ways to break into company systems, steal personal data, and find ways to extort money.
• Real Estate Fraud: In real estate, fraud can take many forms, such as phony property listings, fake mortgage applications, or the use of another person’s identity to sell an asset.
In 2023, the Canadian Anti-Fraud Centre (CAFC) processed 63,519 fraud reports, impacting 41,988 victims and resulting in losses of $569 million. However, the devastating impact of fraud is not only financial. For victims, being cheated or having their identity stolen can cause fear, insecurity and psychological and physical trauma. This is especially true for more vulnerable members of the population such as people living with disabilities, older adults, newcomers to Canada (See the top Canadian scams sidebar below).
Recognizing Red Flags
Detecting potential fraud before it happens is crucial to preventing it. There are several warning signs to talk to client’s about and to watch for:
Be cautious of unsolicited communications, such as emails or phone calls offering services or requesting personal or financial information. Legitimate organizations typically have a more professional approach, don’t knock on doors or ask for sensitive details through these channels.
Fraudsters often use pressure tactics, creating a sense of urgency to rush individuals into making quick payment and decisions. For example, they might present a “limited-time” investment offer to pressure clients into committing without proper due diligence.
Be wary of offers that seem too good to be true. Promises of guaranteed high returns with minimal risk are common red flags. Scammers often send links to unsuspecting victims to click.
Inconsistencies in information and behaviour during transactions can also indicate fraudulent activity. Look for discrepancies or unusual behaviour, reluctance to provide necessary documents. A lack of transparency can be signs of potential fraud.
Best Practices
1) Begin with education. Become familiar with and discuss common fraud schemes and how to recognize them. If you can attend workshops, subscribe to bank newsletters and compare notes with other professionals.
2) Encourage clients to adopt stronger security practices. State the importance of strong, unique passwords accounts and changing them regularly. A password manager can help securely manage and store different passwords.
3) Enable two-factor authentication (2FA) provides an extra layer of security by requiring a second form of verification in addition to the password.
4) Monitoring financial accounts. Clients, trusted advisors and family members should be reviewing financial statements and transactions to identify any unauthorized activities promptly.
5) Keeping software up to date, including antivirus programs and firewalls, is important to protect against vulnerabilities.
6) Being cautious when sharing personal information. Be wary of unsolicited requests and even when necessary, do not disclose sensitive details over unsecured channels.
7) Ensure that all parties are verified. Use secure payment methods, and keep detailed records of all communications and transactions.
8) Place fraud alerts on credit reports to protect against identity theft. A fraud alert notifies potential creditors to verify the identity of the person before opening new accounts.
9) A credit freeze can be considered, which restricts access to credit reports and makes it more challenging for identity thieves to open accounts in the client’s name.
10) Banks don’t ask you to keep secrets. Know that your bank will never ask you to keep secrets, ask you to wire money, crypto currency or send a gift card in order to catch a cheating branch staff.
Recovering
Despite preventive measures and best efforts, fraud can still occur. When it does, helping victims recover is an important step.
• Reporting: Assist clients with reporting the fraud to relevant authorities, such as your local police, credit bureaus, and the CAFC.
• Credit Monitoring: Recommend credit monitoring services to track and address any inaccuracies or fraudulent activities on credit reports.
• Emotional Support: Experiencing fraud can be stressful and disheartening. Direct victims to professional counselling if needed to help them cope with the emotional impact.
• Review and Update: Work with clients to review and update their security measures after an incident. This might involve changing passwords, enhancing security protocols, or adopting new technologies to prevent future occurrences of fraud.
In a world where fraud is becoming increasingly sophisticated and pervasive, the role of a trusted advisor is more critical than ever. The responsibility to safeguard your clients’ trust and financial stability requires not only vigilance but also a proactive approach to prevention and recovery.
Each step you take—whether it’s educating clients about the latest scams, implementing robust security practices, or supporting victims through recovery—plays a vital part in a broader effort to combat fraud. Stay informed, stay alert, continue to advocate for caution and diligent security practices, and refer clients to:
https://www.cibc.com/en/privacy-security/banking-fraud/scam-quiz.html.
Kaylie Dolan is a graduate student in International Migration and Public Policy at the London School of Economics and Political Science, and a freelance writer for the Canadian Abilities Foundation.
The top Canadian scams
According to experts, some of the latest schemes to watch out for are:
1) Grandparent scam involving calls to kids in danger, or needing money in an accident or in jail.
2) Fake contests and sweepstakes with pre-paid tax or fee to claim the prize.
3) ID spoofing to get access to accounts/credit cards.
4) Imposter travel sites for fake flights and hotels once fees are paid—they are gone.
5) Romance scams on dating sites- lovers woo singles and then ask for financial help.
6) Extortion related to hacking laptop for naughty photos.
7) Offers of tech support as an excuse to hack personal funds or information.
8) Household—deposit to contractors who disappear after deposits are given.
9) Fake websites pretending to offer newcomer support for a fee.
