June 2016
Avoid being a victim of online financial fraud by recognizing the more common fraud schemes.
Grandparent Scam
A grandparent receives an unexpected telephone call from someone claiming to be their grandchild. The caller says it is an emergency and asks them to send money. These scammers may have found your name and that of your grandchild from a social networking site or obituary.
If you receive such a call, confirm it is legitimate before sending money. Contact the grandchild by calling them or ask a personal question of the caller that would be hard to answer before sending money.
Identity Theft
Someone has taken possession of your credit card information, drivers licence, social insurance number, bank account or other personal information. Thieves use this “stolen” personal information to access your bank accounts, open new bank accounts, apply for loans or credit cards, make purchases, obtain passports or receive government benefits.
If you suspect identity theft or are a victim of identity theft, contact your local police station and file a report.
Ponzi Scheme
A Ponzi scheme is a fraudulent investment where the scammer pays returns to its investors from new investors, rather than from an earned profit.
New investors are enticed by higher returns. An increasing flow of money from new investors is required to sustain the fraud.
If the return seems too good, be skeptical.
Phishing Scams
Phishing is typically fraudulent e-mail messages that appear to come from legitimate sources such as your bank or credit card company. Their purpose is to trick you into handing over personal and banking details. The e-mail may redirect you to a spooked website in an attempt to get you to divulge private information such as passwords or credit card numbers. A typical e-mail is one stating you are receiving it due to fraudulent activity on your account.
Legitimate organizations such as a bank or government authority do not ask for personal information via e-mail. If you receive such an e-mail asking you to visit a specific website to “update”, “validate” or “confirm” your account information, be skeptical. Do not reply to these e-mails, click any links or call any telephone number. Call your bank or financial institution to determine the authenticity of the e-mail.
Dating/Romance Scams
Such scams rely on compassion and romance to obtain money. They may start on legitimate dating sites. After a few e-mails or conversations there may be mention of a sick family member or other problem. Soon there is a request for money to help them out. It may be needed to transfer a larger amount of money out of their country. There may be a promise to share it with you. They may ask for banking details. They could ask for money to pay an administrative fee or taxes.
Never give credit card or online account details, or send money, to anyone you do not know or trust.
This information is provided by the Financial Crimes Unit of Toronto Police Services.
