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A recent spate of high-profile Canadian white-collar crime cases has highlighted the fact that just about anyone could suffer the trauma of being swindled out of their life's savings.
"Financial fraud is very big business for the bad guys," says Canada's banking ombudsman Douglas Melville. "As a society, we need to treat these frauds as a serious crime. They can destroy people's lives."
Police and industry sources say these types of crimes are not only growing, but also taking on new and increasingly sophisticated formats. "You tend to see a spike during economic downturns. Perhaps that's when people are more desperate for attractive-sounding opportunities or when more people are driven to fraud to make ends meet," Mr. Melville says.
According to the Canadian Anti-Fraud Call Centre, the total reported dollar loss by Canadian victims of identity theft hit $10.9-million last year, up from $6.5-million in 2007.
There are, however, some basic common-sense precautions Canadians can take to lower the chances of becoming the next financial fraud victim. On the start of fraud prevention month, Mr. Melville offered these tips:
1 Shred personal documents If you feel you no longer need to keep them, make sure to destroy your financial statements, invoices, anything with personal information that someone could use to hurt you. Some fraudsters will take information and apply for loans or credit cards in your name. It is known as "dumpster-diving" as garbage bins are a favourite place for fraudsters to find useful information.
2 Protect your PINs Don't write your Personal Identification Numbers on or near your credit or debit cards. Don't share your PIN and don't use numbers for your PIN like your phone number, address, birth date, etc. These could make you responsible for any losses if the card is lost or stolen. Cover the PIN pads at stores and ABMs when you enter it.
3 Don't give out information over the phone Your bank will never call you at home requesting personal information. These are scams and should be reported to your bank and to the Canadian Anti-Fraud Centre (formerly Phonebusters) at 1-888-495-8501 or info@phonebusters.com. Don't get lured into helping a so-called investigator uncover a fraud at your bank - they are the fraudsters.
4 Don't get scammed online Your bank will never send you an e-mail requesting personal information, especially log-in information, nor will it ever ask you to click on a link to your bank's log-in screen to enter information. These scams capture your username and password. If you get an e-mail like this, report it to your bank and the Canadian Anti-Fraud Centre.
5 Don't fall to temptation Many fraud victims are lured into scams with promises of quick, easy money. Great business opportunities, investments with guaranteed returns, requests for help to get cash out of developing countries: these are warning signs. Don't take the risk.
6 Beware of work-from-home scams Don't send money to someone with a promise of getting paid work you can do at home. Don't accept a job as a "representative" or "collection agent" for a company that has you collect and deposit cheques into your bank account and then wire the cash to "Head Office" while keeping a 5 or 10 per cent commission for yourself. The cheques turn out to be counterfeit and the bank comes after you for the cash because you are responsible for any deposits to your bank account.
7. Protect your home while away If you are going to be away for an extended period, have someone check on your home. Not only does it help preserve your insurance coverage, but it also could protect you from fraudsters. Some homeowners have returned from tips to find that someone broke in, moved in, took out a big mortgage on the house by pretending to be the owner, and ran away with the cash, leaving behind a huge mortgage for the home owner.
8. Online shoppers beware Online shopping from reputable retailers is one thing, but shopping from little-known sites or buying items from online services like Craigslist and Kijiji requires special care. Many fraudsters use false online offers to scam buyers. Making your purchase with a credit card can actually protect you better because you may be able to ask your credit card company for a "chargeback" if your purchase was not as advertised.
Need more information? Check out these tips from Canada's Competition Bureau on how to recognize and report financial fraud. Or contact the Ombudsman for Banking Services and Investments by calling 1-888-451-4519 or emailing ombudsman@obsi.ca