The little black book of scams - Part 1

Feb 04, 2019

Scottish author William McIlvanney wrote that "good lies need a leavening of truth", meaning that the most believable scams have an element of realism or truth to them. This can make it hard to determine what to believe and what not to.

Here is what the Government of Canada calls the little black book of scams:

Identity Theft

Scammers are always on the lookout to collect or reproduce your personal information to commit fraud. Thieves can make purchases using your accounts, obtain passports, receive government benefits, apply for loans, and more. This could turn your life upside down.

One of the most popular ways to do it is from your phone number. They don’t steal the phone; they simply hijack the phone number. This enables them to intercept those one-time verification codes sent to that mobile number by text, email, or phone call. Armed with their victim’s personal information, such as date of birth and last four digits of their Social Security number — information that is widely available — these identity thieves trick the wireless carriers into transferring (or porting) their target’s phone number to a new account or device they control.

Fraudsters use techniques that range from unsophisticated to elaborate. Offline, they can go through trash bins or steal mail. Online, they can use spyware and viruses, as well as hacking and phishing.

Romance scams

This was the number one scam of 2018 as reported by the BBB. Keep your guard up and look out for potential scammers who will try to lower your defences by appealing to your romantic and compassionate side. They can prey on you on popular, legitimate dating sites as well as on fake ones.

On a real dating site, a scammer might send you a few messages and a good-looking photo of themselves, or of someone they claim to be. Once you are charmed, they will start asking you to send money. They may claim to have a very sick family member or a desperate situation with which they need your help. Once you give them money, they often disappear.

A fraudster can also create a fake dating site where you pay for each message you send and receive. To keep you writing back and paying, the scammer may hook you in with vague emails about their love and desire for you.

In many cases, the scammer may even arrange to meet up with you in person to make their fraud seem more credible.

Tax scams

Over the last few years, the ‘CRA’ scam has successfully stolen over $5 million in 2017 and $6 million lost in 2018 according to the BBB. You get a text message or an email from the Canada Revenue Agency (CRA) claiming you're entitled to an extra refund and all you need to do is provide your banking details. Watch out—this wonderful-if-true situation is exactly what a tax scam looks like.

Another variation is that they call you to say that you owe the CRA money and that you need to pay right away, or else they will report you to the police.

In any case, if you do receive a call, letter, email or text saying you owe money to the CRA, you can double check online via "My Account" or call 1-800-959-8281.

CEO Scams

Do you work in accounting or finance? Do you have the authority to move money at work? Do you report to a chief executive officer (CEO)? If yes, be on the lookout; this scam specifically targets you.

In a typical "CEO scam," fraudsters will impersonate a senior company executive, either by gaining access to their email address or by imitating one. They will send realistic-looking emails that try to trick you into wiring money to a third party.

The emails will make the request sound urgent and confidential. For example, they may say the money is needed to secure an important contract, complete a confidential transaction, or update a supplier's payment information.

Fraudsters are usually strategic about the timing of these emails. They send them when executives are away or hard to reach. This lucrative scam can cost businesses tens of thousands to millions of dollars.

Emergency scams

Emergency frauds usually target loving grandparents, taking advantage of their emotions to rob them of their money.

The typical scam starts with a grandparent receiving a phone call from someone claiming to be their grandchild. The "grandchild" goes on to say they're in trouble—common misfortunes include having been in a car accident, getting locked up in jail, or trouble returning home from a foreign country—and they need money immediately.

The caller will ask you questions, getting you to reveal personal information. They'll also swear you to secrecy, saying they are embarrassed and don't want other family members to find out what's happened.

One variation of this ploy features two people on the phone, one pretending to be a grandchild and the other a police officer or lawyer.

In other cases, the scammer will pretend to be an old neighbour or a family friend in trouble.

Subscription traps

A subscription trap can trick you by offering "free" or "low-cost" trials of products and services. Products commonly offered are weight loss pills, health foods, pharmaceuticals and anti-ageing products.

Once you provide your credit card information to cover shipping costs, you are unknowingly locked into a monthly subscription. Delivery and billing can then be difficult, if not almost impossible, to stop.

Purchase of merchandise scams

Online shopping is a favourite pastime for many consumers. But many deals you see online—from inexpensive designer purses to significantly discounted electronic goods—are too good to be true.

Fraudsters can create accounts on legitimate auction sites, such as eBay, or on an online marketplace, like Kijiji or Craigslist. They will advertise their products at very low prices, enticing you to buy them.

At the end of the day, if you do get something, it might be of poor quality or a bad imitation of what you expected.

In other instances, fraudsters will lure you into clicking on sponsored links that will direct you to a seemingly genuine website. If you decide to buy from there, you won't benefit from any protection or services that legitimate websites offer. If a site or offer stands out dramatically from the rest, there's likely something off.

Phishing and smishing scams

As we spend more time online, fraudsters are getting more creative with scams in the digital space.

Phishing is when you get an unsolicited email that claims to be from a legitimate organization, such as financial institutions, businesses or government agencies. Scammers ask you to provide or verify, either via email or by clicking on a web link, personal or financial information, like your credit card number, passwords and social insurance number.

Smishing is the same thing, except it occurs via text messages.

These messages often copy the tone and logo of organizations you trust, and usually include a call to action. They take many shapes and forms but the bottom line is that they seek your personal details.

Pamela Coquet
Financial Strategist with Savanti Wealth

Want some more information on identity theft coverage? Send us an email or give us a call and we can help you at info@savanti.ca or (403)968-8443

Read Part 2 of this series: Sidestepping Fraudsters



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