2022-09-23T10:14:08-04:00Oct 6, 2021|

How to protect yourself against financial fraud as a newcomer in Canada

As a newcomer in Canada, your financial security is of prime importance. However, fraudsters and scammers recognize that newcomers can be easy targets, as they don’t necessarily have the information needed to protect themselves against fraud. Being in a new country, you may not be aware of the ways in which financial fraud occurs, how to identify fraudulent situations, or where to report fraud.

This article gives you an overview of the various types of financial fraud and scams that occur in Canada and provides valuable tips to help protect you against financial fraud as a newcomer.

In this article:

Recognizing common financial fraud and scams in Canada

Phishing emails or text messages

Phishing emails or text messages are often designed to look like they are from a source or website you trust, like your bank or an online store. The sender will ask you to click on a link or download a file, or will try to create a sense of urgency, such as saying there has been some suspicious activity from your account or that you need to update your payment information to keep your account active.

Be sure to check the email address the email originated from. If the domain name doesn’t match the organization’s name, it’s likely a phishing attempt. Other red flags can be bad grammar, a generic greeting, or unsolicited attachments in the message. If you suspect that an email or text is fraudulent, call the organization to verify before clicking on any links or sharing any personal information.

Generally, Canadian banks will never ask you to share personal information, such as account numbers or Social Insurance Number (SIN), over email or text message.

Debit or credit card fraud

Debit or credit card fraud happens when someone steals your credit card, PIN, or bank card information and uses it to make purchases or withdrawals from your account. 

Fraudsters can use different ways to get your credit card information, including stealing bank statements from your mailbox or garbage, hacking into company databases to steal information, prompting you to use your credit card on a fake website, or through phishing emails. You can prevent debit and credit card fraud by keeping your credit card and personal information safe.

Check your bank statements or banking app regularly to ensure that you can identify all the transactions. If you think you have been a victim of credit card fraud, call the phone number on the back of your credit card immediately to get in touch with your bank and lock your card to avoid additional fraud.

Immigration and citizenship fraud  

There are several private immigration consulting organizations that specialize in helping newcomers come to Canada. However, if you come across a website that asks you to pay for immigration or application forms or guides that are otherwise available for free on the Immigration, Refugees, and Citizenship Canada (IRCC) website, it might be fraudulent. 

You may also receive fraudulent phone calls or emails from someone posing as an immigration or citizenship service provider, claiming that they can guarantee entry into Canada, provide jobs, or fast-track your immigration processing for a fee. Never share your financial details with such organizations without contacting the website owner and checking online reviews to confirm the legitimacy of the business. Also, learn about the immigration and citizenship process so you can identify fake claims.

Employment fraud

While looking for a job as a newcomer in Canada, be on your guard against fake “employment agencies” who ask you to pay for “training” in order to get a job or promise you a guaranteed job if you pay a large upfront fee. Legitimate recruiters or agencies in Canada will never guarantee job placements or force you to undergo mandatory training. Typically, when employers use external recruiters or agencies to find candidates, the organization, not the candidate, pays the agency’s fee.

There have also been instances of newcomers receiving fake job offer letters as part of a phishing email, where fraudulent “employers” will ask you to provide your personal information or sensitive details about your references.

Fake phone calls from “CRA” or tax fraud

Many newcomers receive fraudulent phone calls from someone claiming to be from the Canada Revenue Agency (CRA) or Service Canada. Typically, the caller (or recorded message) will state that you have unpaid tax liabilities or that your Social Insurance Number (SIN) has been compromised. In some instances, scammers may even claim there is a warrant out for your arrest, which can be quite alarming.

They may ask you to share your SIN number or make a payment through wire transfer, bitcoin, or prepaid gift cards. These callers are often aggressive and use threatening language to scare the recipient. In a variation of this type of fraud, the caller (supposedly the CRA) will claim that you’re entitled to a tax refund and will need to share your banking information to get it. 

The CRA typically contacts individuals by message in their secure online portal, so if there is an issue with your tax return, you will see a message about it there.

Tips Icon  Tip: Download Arrive’s Tax Guide for Newcomers to Canada to learn about filing your taxes as a newcomer.

If you’re unsure about the legitimacy of a call, hang up and call the agency to verify its authenticity. Educate yourself on the ways legitimate government agencies can contact you and the questions they may ask. 

Pyramid or Ponzi schemes 

A pyramid scheme is a business model where you’ll be offered payment or commission for enrolling other members, rather than for selling actual products or services. You’ll be asked to pay an upfront “membership fee,” with promises of being able to turn a profit once you start bringing in more members.

A Ponzi scheme is a type of fraud where you’re lured into investing money with the promise of very attractive dividends. In reality, your money is not being invested anywhere and is instead being used to pay “dividends” to other investors. Investors may receive lucrative dividends for some time until the pool of new investors dries up. If the promised returns seem too good to be true, it may be a Ponzi scheme. Be sure to carefully vet investment opportunities or speak to your financial advisor before making any investments.

Catphishing or romance fraud

If you’re active on dating sites or apps, keep an eye out for romance fraud. Catphishing, or catfishing, is when a person pretends to be someone else online, using a fake name, photograph, or story. A fraudster may spend time talking to you online, and once they’ve established a romantic connection, they’ll ask you for money, claiming that they need it to help a sick relative or get over a bad stretch. In some cases, the scammer may even meet you in person to make the relationship seem more legitimate.

Fake computer virus or ransomware

In this type of scan, the victim gets a call or email claiming that their computer has been infected with a virus. The scammer may ask for money to remove the virus or could try to access personal information and passwords through their device. Be sure to install an anti-virus to protect your laptop and mobile device. 

Fake prizes

If you receive a message, email, or phone call saying you’ve won a prize for something you don’t remember participating in, it’s probably a scam. Fraudsters may use this opportunity to collect your personal information or verify your contact details, so avoid responding to such messages or sharing any information. If you’re unsure about the legitimacy of the prize, check the organization’s website to confirm whether the contest or offer is real.

Tips to protect yourself against financial fraud as a newcomer

Financial fraud can impact your financial stability and, as a newcomer, it’s important to safeguard yourself against potential threats and fraudulent activities. Here are some key things you should keep in mind to protect yourself against financial fraud:

    • Keep close track of finances. Review your bank account, credit card statements, and credit report regularly and report any inconsistencies early. If you’re unsure about what to look for, speak to a financial advisor for more information.
    • Protect your personal and financial information. Change your banking passwords often and don’t write them down. Keep your credit card and credit card information safe, and don’t use your credit card on untrustworthy websites. Don’t share your personal or financial information, including your SIN, unless you know why it’s needed and how it will be used. Educate yourself on who can ask for your SIN or credit history, and only share this information if it’s absolutely necessary.
    • Learn to identify fraud. If an offer seems too good to be true, it’s likely fraudulent. Always review the terms and conditions of the service or financial product you’re purchasing before making any payments.
    • Borrow only from trustworthy financial institutions. Credit is an essential part of Canada’s financial ecosystem. Financial institutions like banks, credit unions, mortgage providers can provide you with credit to cover your expenses. Avoid going to illegitimate local lenders or payday loan providers as they could misuse your financial information or lead you into debt.
    • Verify suspicious phone calls or emails and report fraud. If you’re unsure about the legitimacy of an email or call you received, check for signs of phishing or contact the organization or agency to verify whether the information is accurate. Don’t share your financial or personal information with anyone or click on any links until you’ve verified the authenticity of the message. If you suspect that you’ve received a fraudulent phone call or email, report it to the Canadian Anti-Fraud Centre by telephone at 1-888-495-8501, through their website, or by email (info@antifraudcentre.ca). If your SIN has been stolen, report it to Service Canada at 1-866-274-6627 as soon as possible.
    • Keep your laptop and mobile devices safe. Never give physical or virtual access to your devices to someone who isn’t an authorized service professional or someone you didn’t contact for service or repair. Your devices may contain saved passwords, login details, or other personal information that fraudsters can extract and misuse. Always wipe your devices by restoring factory settings before selling or scrapping used laptops or mobile phones.

As a newcomer in Canada, receiving phone calls from someone posing as a CRA official can be alarming. By learning to recognize common financial scams and verifying potentially fraudulent claims, you can safeguard yourself against fraud. Remember, by reporting fraudsters, you are protecting not just yourself but also countless others who may otherwise be targeted by financial scams.

Speak to a newcomer financial advisor