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Credit Coach: How to avoid being a victim of fraud

Did you know that March was Fraud Prevention Month?
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CreditCoachStory

Did you know that March was Fraud Prevention Month? Fraud Prevention Month is an annual public awareness campaign that hopes to bring the discussion on electronic fraud, identity theft and credit scams to the table.

As a Licensed Insolvency Trustee, I help all kinds of individuals that have been taken advantage of by charlatans and snake oil salesmen. The damage done by online scams and telephone predators can be irreversible —  the only option available for some is to declare personal bankruptcy.

To borrow from the title of a book by Andreas Schroeder…what are some of the current “scams, scandals, and skullduggery” out there, and what steps can you take to avoid being a victim?

That may not be CRA on the phone

The most common instance of fraud popping up right now involves fake but realistic and urgent phone calls from individuals claiming to be from Canada Revenue Agency (CRA). Generally speaking, debtors encountering this scam will receive a call indicating that a tax balance is due and needs to be paid immediately or else the debtor will be subject to any manner of personal asset seizures and maybe even jail time.

March and April are busy months for these types of calls as the tax filing deadline falls annually at the end of April. Follow this link to CRA’s website for information on collection practices. Generally speaking, CRA will provide time for you to pay a tax bill. They will generally send correspondence to your address with a statement disclosing the outstanding amounts and they will not ask you to immediately send payment in some electronic form. If you are unsure, ask the individual on the phone to confirm the following information before you speak with them about an urgent bill.

  1. Ask them for the address and phone number of the tax services office they are calling from. Offer to call them back after you have researched and confirmed that the toll-free number and address provided checks out.
  2. Ask them to confirm the tax year and the date of the assessment for which they claim to be collecting on. You can also ask for a statement to be mailed to you.
  3. Sometimes it is a genuine call and you do owe some tax monies. It is my belief that CRA does not ask for immediate electronic transfer and or the procurement of gift cards as payment.  A bona fide CRA collections officer will usually accept a cheque that is mailed after you have received a statement of account and a confirmation of the tax services office address.

Keep a close eye on your credit cards

A second situation we are encountering regularly is the unauthorized use of credit cards by a family member. We see it regularly — an individual’s child, grandchild or caregiver who has financial difficulties (or an addiction) uses a credit card belonging to someone close to them. With the advent of tap technology and PIN numbers, if we’re not being diligent and keeping an eye on our credit cards, it’s possible to be taken advantage of. To avoid falling victim to someone using your card without your knowledge or permission, take the following steps;

 

  1. Protect your PIN number. Do not allow anyone to have your personal ID numbers and/or account information. If you want to financially help a family member, provide them a money order, bank draft or cash. Do not allow them to use your credit card.
  2. Review your statements and check your credit score and report online. Equifax and TransUnion are two of the larger credit rating agencies. Monitor your credit score and review your credit report for unknown charges, unusual ratings, and cards or credit that you do not remember obtaining. Also remember to closely review your credit card statements each month, keeping an eye out for unknown charges.
  3. Keep your cards close to you. Do not allow them to leave your wallet, unless your hands are on them.

That plea for help may be a hoax

A third category of frauds taps into our desire to help someone in need. A family member or stranger tells an emotional story that leads us to take an action — usually giving money.  It is generally too late when we find out the story is a hoax, and we’ve been swindled out of hundreds, if not thousands, of dollars.

The stories seem to have a common theme. A serviceman is trapped overseas with no way to bring home a child fathered while on duty. A niece, nephew or grandchild is in trouble with the law and their “legal representative” contacted you because they cannot go to the parents. All you need to do is send a few thousand dollars to the “lawyer” contacting you on the phone and the charges will be taken care of.

If you’re asked for financial assistance by a stranger on the phone and it just doesn’t sound right — too good to be true or too horrible to believe — take a moment and do the following:

  1. Confirm who you are speaking with, ask them for credentials, a call back number or an address to their place of business. Hang up the phone, check them out and call them back if you feel it is a true call.
  2. If the call is about a relative in trouble, ask to speak with that relative. If the scammer is fishing for information ask them to confirm the birthdate of the child and the names of the parents. Often times a little push back will stop a scammer in their tracks. Let’s face it, these types of individuals are looking for the easy route.
  3. If it sounds too good or too sad to be true, it probably is. Hang up the phone. If it is legitimately your concern, the lawyer will call you back.

Do you have a loved one that has been cheated out of their credit rating, hard earned monies or life savings? Your story could protect someone else from falling victim to this type of crime. Tell us your story in the comments below, or join our conversation on Twitter @CreditCoachJS.

Jayson Stoppel is a Licensed Insolvency Trustee and Chartered Accountant with BDO First Call Debt Solutions. With over 17 years in practice, Jayson assists individuals, families and companies with financial difficulties in Thunder Bay and throughout Northwest Ontario. To reach Jayson by email:  JStoppel@BDO.ca . To visit Jayson on Twitter: @CreditCoachJS.