A woman scratches her head and talks on the phone with a Money Mentors credit counsellor as she worries that she may have been scammed.

12 Most Common Types of Scams and How to Avoid Them

If you’ve ever been scammed, then you know how traumatic an experience it can be. Not only is there often a significant material loss, but the fact that there are malicious individuals out there who are trying to hurt you can be a troubling realization.

Scams are on the rise so it’s more important than ever to be on high alert. So, we’ve prepared a list of the 12 most common types of scams and how to avoid them, with one bonus at the end.

Let’s start with 5 telltale signs you’re talking to a scammer.

5 Signs You’re Talking to a Scammer

  • They get in touch with you.
  • It feels too good to be true.
  • They try to entice you, usually with money.
  • You need to provide personal information.
  • They require payment upfront – wire transfer or gift cards.

 

 

1 Employment Scams

Employment scams are particularly wicked because they often pray upon newcomers to Canada. For those that are new to the job market, it may be difficult to tell when a job offer is far too good to be true. These kinds of fake job postings will often list working from home for high salaries and regularly claim not to require an interview. The fake employer will tell you that you got the job and that they need your credit card information for payroll.

How to Recognize Job Scams

Remember the rule that if it’s too good to be true then it probably is. Also, understand that an employer does not need your credit card information to pay you. If something feels strange, give your bank a call and ask them.

2 Tech Support Scams

Tech support scams are one of the most common types of scams and they usually target elderly individuals who may have difficulty with computers. They often use scare tactics to convince people that they will lose all of their files or that their computer will stop working if they don’t pay a fee to the scammers for fixing the computer.

How to Tell if You Are Being Scammed

Get a second opinion from a local computer repair company if you are unsure about whether your computer is broken or not. The local company will always be a cheaper option than the scammer.

Another variation on the tech support scam is the customer support scam, and it may sound something a bit like this:
 

 

3 CRA Scams

CRA scams are very common around tax season and can come in a variety of different forms. They usually involve calling you or sending you a text message, often claiming that the CRA will be sending you a tax refund and asking for personal information to update their records. At other times, scammers can be more threatening, claiming that you have a balance to pay or accuse you of committing tax fraud. Read our blog post on taxes to learn about the CRA and filing taxes.

How to Stop CRA Scams

The single most effective thing you can do to stop CRA scams is to ask for the name and ID number of the agent that you are speaking with, hang up and call the CRA to make sure they have the name on file.

4 Romance Scams

Romance scams, also called Catfish Scams, can be devastating for those affected. Not only are individuals scammed out of large amounts of money, but they are often left heartbroken and psychologically traumatized by the experience. Scammers can spend weeks, months and in some cases years, trying to build up a relationship with someone in order to extract money from them, usually via social media platforms like Facebook.

How to Avoid Catfish Scams

As a rule, avoid sharing personal information with anyone online that you have not met in person. When entering into a relationship with someone online, do everything you can to make sure they are the person they claim to be. Ask to chat with them on video calls and do reverse Google searches on any images they provide. For more information, try this article on how to do a reverse Google image search.

5 Immigration Scams

This is another scam that targets those who have arrived in Canada recently and usually involves intimidation and scare tactics. Scammers phone up immigrants, pretending to be from the IRCC (Immigration, Refugees and Citizenship Canada) claiming that something has gone wrong with their status in Canada and that if they do not pay a fee, they will be forced to leave Canada.

How to Identify an Immigration Scam

Always get a second opinion. Ask for the name of the agent you are speaking with, and contact the IRCC to ask if they have this person on file.

6 Text Scams and Phishing Scams

A phishing scam, or phishing attack, is when you receive an email that looks like it comes from a reputable organization (it may have a company logo or the design of the email may look legitimate) asking you to provide personal information. A smishing scam is the same kind of thing, except via text message.

A text message scam might look something a bit like this:
An image of a text message scam.

How to Stop a Phishing Attack

Pay close attention to the details. A phishing scam email may look official at first but pay attention to the email address. Almost all reputable companies have an email address that ends with their company name. For example, all of our email addresses end in @moneymentors.ca.

7 Advance Fee Loan Scam

This scam cuts close to the work we do at Money Mentors. In an advance-fee loan scam, victims are promised approval on a loan, regardless of their credit score. The catch is that they need to put forward money upfront to secure the loan.

How to Avoid a Loan Scam

The single best way to avoid this kind of scam is to give us a call here at Money Mentors. We work with many different creditors and are very familiar with the world of credit. Our counsellors will be able to advise you on whether you are dealing with a scammer or not.

8 Credit Card Scams

In a credit card scam, scammers often call or text, offering you a new credit card with very low interest rates or other perks.  They will then ask for money upfront or will get you to provide them with personal information so that they can set up your account.

How to Spot this Scam

Don’t trust any phone numbers that look suspicious. If in doubt, hang up the call, and type the phone number into a search engine. If the number belongs to a reputable organization, it will most likely show up. If not, there’s a good chance it’s a scam.

9 Kijiji Scams and Facebook Scams

Online shopping scams are very common on sites like Facebook Marketplace and Kijiji. Buyers and sellers should remain vigilant as there are scams targeting both.

How to Identify an Online Shopping Scam

As a buyer, always check reviews to make sure that you are purchasing from a legitimate source. As a seller, watch out for scammers who claim to live far away and need to send a courier.

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Online Shopping with Confidence

This course will teach you what to watch for when shopping online including the market price for new and used products, shipping costs, fees, how to tell if the website is secure to prevent fraud and credit card security. This course is recommended for anyone that shops online. Try this FREE online course now! .

 

10 Crypto Scams

The large amounts of money being made by some people in the cryptocurrency world makes investing in crypto very alluring to some. The most common type of cryptocurrency scam is known as a “rug-pull”. Scammers set up a new cryptocurrency that looks legitimate from the outside. Then, once enough people have bought in, the scammers take the invested cash for themselves, and leave victims with a worthless cryptocurrency token.

How to Avoid a Cryptocurrency Scam

The cryptocurrency space is still largely unregulated. There are very few protections in place to help you if you lose money. Unless you have a significant amount of experience in the world of crypto, the best way to avoid this scam is just to avoid cryptocurrency investments altogether, at least until more regulation is in place.

11 Investment Scams

Just like cryptocurrency scams, an investment scam will manufacture a sense of urgency, making you feel like you’re going to miss out on a golden opportunity if you don’t act quickly and invest. Scammers will be very pushy and aggressive over the phone.

How to Recognize this Scam

Do your own research. Get the name of the company or stock they are asking you to invest in and spend some time looking into their history as a company. Most successful investors make gradual returns on their investments over a long period of time. If you are being promised high returns in a short period of time, alarm bells should be ringing.

12 Grandparent Scams

Another particularly evil scam in that it targets the elderly and preys upon their desire to help their grandchildren. Scammers will call a grandparent, pretending to be their grandchild, and ask for money because of some emergency. For example, they could ask for lawyers fees, or bail money, or car repair fees.

How to Protect Yourself From an “Emergency” Scam

If you don’t already, make sure you have your grandchildren’s contact numbers saved on your phone. That way, if their name doesn’t appear on your phone, you could suggest hanging up and calling them back.

Bonus: One to Watch – Deepfake Scams

Artificial Intelligence is making “deepfakes” increasingly difficult to spot. A deep fake is a computer-generated audio and/or visual mimicry of an individual. This could be someone you know, or an influencer you follow on social media. As AI progresses, these scams will become more common.

How to Prevent an Impersonation Scam

Preventing an impersonation scam is going to become very difficult. Once this technology becomes more widely available, scammers will be able to mimic people you know. Consider only accepting phone calls from numbers that are saved on your phone, and being extra vigilant when listening to people online.

Money Mentors Course: Fraud Detection and Prevention

A woman reaches into her purse for her credit card.

 

This free course explores fraud and identity theft, including the different scams you may encounter. Learn how to prevent identity theft and the steps to take if you become a victim of identity fraud.

 

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Fraud Detection and Prevention

Fraud Detection & Prevention provides information on what fraud is, some of the common types of fraud, and how to protect yourself. You will see how fraud affects individuals, both financially and emotionally. Try this FREE online course now! .

 

Other Resources

Better Business Bureau 

Canadian Anti-Fraud Centre

Consumer Council

Edmonton Police Service Signs of a Scam 

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