Every day, I get scam emails and phone calls. Some I immediately recognize as scams. Others appear legitimate at first glance. Fraud is a growing problem that affects millions of people in North America and around the world every year. Today’s post will help you spot the most common scams. More importantly, you’ll want to review my list of 15 things you can do to protect yourself from fraud.

This post was originally published in November 2020 and updated in September 2023.

Scammers are getting more creative every day

Is it just me or does it seem there’s a new fraud or a new variation of an old scam cropping up every week?

Whether it’s the tried-and-true email saying you’ve been left money by a long-lost relative, or the calls from the RCMP threatening to throw you in jail for not paying your taxes, or the phone call saying a beloved relative is in desperate need of help, scammers prey on our emotions. Sadly, it’s often the most vulnerable people who fall for their tactics. 

The cost of fraud is exploding

At the mid-way point of 2023, the Canadian Anti-Fraud Centre had received 32,000 reports of fraud with losses adding up to over $258 Million. What’s interesting is a comparison to 2020 when there were more reports of fraud, but the losses were under $100 Million.

In the United States, the Federal Trade Commission reports losses from fraud in 2022 reached close to $9 Billion, a 30% increase over 2021.  

These rising numbers are scary. Your best defense against fraud is to educate yourself and be vigilant.

The most common types of fraud

The Canadian government reported the top ten most common types of fraud in 2020, based on the number of reports.

1. Extortion is unlawfully obtaining money or property through coercion. The best examples are the calls threatening to put you in jail for not paying your taxes. And, then there’s the infamous “I’ve seen you watching porn” emails. In both of these examples, the fraudster demands immediate payment.
2. A scammer who says they are from a business, government agency, law enforcement organization or financial institution tries to trick you into giving out your personal information. The goal is to use it to commit identity theft.
3. Phishing is an email that appears to be from a recognizable company. The email asks you to verify your account information or purchase. Again, the goal is to trick you into providing passwords and other personal information.
4. Merchandise scammers create fake ads to get you to buy goods and services that don’t exist.
5. Some elaborate scams target job seekers, asking for payment in exchange for a job offer, or help applying for a job.
6. Sale of merchandise by complainant. These scams can involve spoofed payments for merchandise you’re selling.
7. Service scams involve offering services at very low rates. The services provided can be of poor quality or, in some situations, unsafe.
8. Spear phishing frauds try to extort money by claiming to be from legitimate companies that you have a relationship with.
9. Romance scams prey on lonely, vulnerable people by taking advantage of an online relationship to get you to send money. Although less frequent than other types, these scams often involve large sums of money.
10. In emergency scams, someone claims to be a friend or family member who is in trouble and needs money.

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15 ways to protect yourself from fraud

With so many different scams out there, you can’t let your guard down. Here are 15 ways you can avoid the trauma of being a fraud victim.

General

1. Be suspicious. Question everything and trust your instincts. If something doesn’t feel right or appears too good to be true, it’s likely a scam.
2. Review bank accounts and credit card transactions often. Report any unusual activity to your financial institution immediately.
3. Protect your PIN when using your credit or debit card in public. Shield it with your hand or body. And definitely don’t write it on your card or share it with anyone.
4. Deal only with known, reputable businesses. Don’t do business with people who sell door-to-door or on the phone. If you need work done, ask for recommendations from family and friends.
5. Report lost or stolen credit cards immediately. Yes, it’s a pain to be without your card while you wait for a replacement, but it’s better to be safe than sorry.
6. Buy a shredder. Shred every piece of paper with your name or other personal information.

Phone scams

Phone scams are rampant these days. I never answer my phone unless caller ID tells me it’s someone I know personally. Here are some things to be aware of to protect yourself from fraud. 

7. Don’t believe caller id. Scammers can spoof the number to make it appear legitimate.
8. Never give out personal or financial information over the phone unless you made the call. Reputable businesses will never demand immediate payment by e-transfer, bitcoin or gift cards.
9. Don’t be intimidated by aggressive tactics. Say no and hang up. If the caller claims to be from a company you do business with, call the company using the phone number on your statement or their website.

Email fraud

As I mentioned before, I get fraudulent emails multiple times a day. I almost got caught on a fake email a few years ago. Thankfully, I stopped before entering any information. There is really just one rule to protect yourself from fraud with email, but it’s a critical one.

10. Never click links or open attachments in emails unless you are certain of the source. Scam emails can appear legitimate at first glance. Here are some ways to spot a fake. I’ve included some images from a real example that just landed in my inbox.

• It’s an unusual or unexpected email from someone you know. Often these say things like “I thought you’d like this” or “Is that you in this video?” The goal is to get you to click a link or open an attachment that could contain a virus or spyware.
• An email from a company or government agency that doesn’t look like other communications you received from them in the past. Spelling or grammar errors, or poor-quality images, are two immediate clues. Here’s a great example I just received about a survey from Shoppers Drug Mart. Can you spot the fake?

• The email refers to a purchase or transaction you didn’t make.
• The sender’s name and email address don’t match. I’m pretty sure a reputable company like Shoppers Drug Mart didn’t hire “cheapnet.it” to send their emails.

• If you’re tempted to click a link, first hover over the link (but don’t click) it. On a computer, you can see the link’s URL in the bottom left corner of your browser. If you’re using a tablet, press firmly on the link and you’ll see a popup with the URL. If the URL doesn’t match the company website, don’t click it! The survey link in my email goes to sunnyqbreeze.com, not shoppersdrugmart.ca.

Online security

Beyond email, we spend a lot of time online these days. Every online interaction opens up the opportunity for fraud. But there are a few things you can do to stay safe.

11. Use strong and secure passwords and don’t share them. Don’t use common words or sequential strings of letters and numbers. Use a mix of upper and lower case letters and special characters. Change your passwords often, especially if you think there’s a chance your password has been compromised.
12. Be careful what you share online.
    • Check the privacy settings on your social media accounts so you know who can see your posts.
    • Don’t fill in “surveys” or online games that give people the answers to your personal verification or security questions.
    • Don’t post pictures of event tickets. Not only does this let people know you won’t be home on a specific date, but scammers can copy and reproduce tickets.
13. Avoid free public wi-fi. It’s so tempting but these networks are NOT secure.
14. Keep your antivirus software up to date. This is your best protection against hackers on your laptop or desktop. It’s well worth the cost.
15. Set up multi-factor authentication (MFA) with your financial institutions. Most companies have Personal Verification Questions (PVQ) or multi-factor authentication to protect your account. Make sure your PVQs aren’t commonly known things like the name of your first pet whose picture is all over your Instagram. And although, MFA can be inconvenient, dealing with fraud or identify theft is a pain that you don’t want to go through.

Share what you learn

I mentioned earlier that education and vigilance are the best defense against fraud. When you see or learn something, share it! Tell your friends and especially your lonely and elderly family members who may be especially vulnerable.

Are there tips that you would add to this list? Tell us the steps you take to protect yourself from fraud below.

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More posts to help you make the most of your money

This is the last post in my Financial Literacy Month series. Here are some more posts to help you make the most of your hard-earned money:

• 5 ways to take control of your money
• Tell your money where to go
• Money mistakes you don’t want to make
• Money mistakes you don’t want to make – Part 2