Fraud Prevention Month 2024: Top List of Frauds in Canada and Best Practices
Fraud Prevention Month is an annual initiative to raise awareness about fraud and educate individuals and businesses on how to recognize, prevent, and report fraudulent activities. It typically takes place during March in many countries, including Canada.
During Fraud Prevention Month, various organizations, government agencies, and community groups collaborate to provide resources, workshops, and awareness campaigns to inform the public about the different types of fraud.
As of December 31, 2023, the Canadian Anti-Fraud Centre reported 62,365 fraud cases with 41,111 victims resulting in a loss of $554M. This is only from the 5 to 10 percent of victims who reported fraud, and so the actual impact may be even higher.
This blog post analyses some of the recent fraud cases in Canada and includes tips on how to protect personal and financial information.
Understanding Fraud
According to the U.S. Agency for International Development, “Fraud is defined as the wrongful or criminal deception intended to result in financial or personal gain.” This could include false representations of fact, false statements, or concealing information.
As technology advances, especially with Artificial Intelligence (AI), there is no limit to the impact of fraud on individuals, businesses, and even society, as it could lead to financial loss, emotional distress, identity theft, and even loss of trust.
These and many more are the reasons for the initiative of the Fraud Prevention Month Awareness Program. Take your time to also read our previous article on how AI is revolutionizing Canadian businesses.
2023 Top List of Frauds by the Canadian Anti-fraud Centre
1. Identity Theft
Nobody wants to wake up knowing that they have been cloned online and their identity is being used for malicious purposes. Identity theft refers to stealing another person’s personally identifiable information to gain unauthorized access to their financial resources or other benefits.
The CAFC reported 11,228 identified fraud cases, which resulted in 11,228 victims. This fraud can be done through impersonation, especially using AI to create Deepfake voices and cloned profiles.
According to CTV News, in March 2023, over 100,000 Nova Scotians, including teachers, students, and healthcare workers, were victims of a cyber attack resulting in identity theft. Their personal information was stolen from a privacy breach that affected the file transfer software MOVEit.
2. Service Fraud
This happens when individuals or attackers manipulate service-related transactions for their benefit.
Examples of service fraud include emergency or grandparent scams, where the attacker often targets senior citizens pretending to be a loved one or family member in an emergency and requests certain services such as bail money, furnace repair, air duct cleaning service, etc.
Other examples of service fraud include tech support scams, SIN scams, Benefits fraud, fake business listings, etc. The CAFC reported 6,729 cases of service fraud, with 4,824 victims resulting in $22.2 million in losses.
3. Phishing Fraud
In phishing fraud, the attacker attempts to deceive the target into revealing sensitive information, such as passwords and personally identifiable information.
This can be done by presenting yourself as a trustworthy source and using various communication methods, such as email, text messages, or even phone calls.
The CAFC reported 6150 cases of personal information fraud and 5850 reports of phishing scams, resulting in 1265 victims.
4. Investment Fraud
This is a serious white-collar crime where individuals or organizations intentionally deceive investors to gain financial benefits. It involves misrepresenting investment information, such as risks, returns, or legitimacy, to induce people to invest.
Examples of investment fraud include cryptocurrency scams, advance fee schemes, Ponzi and Pyramid Schemes, and Internet Fraud (Stocks pump-and-dump). The CAFC reported 4010 investment fraud cases with 3631 victims, which resulted in $309.4 million in losses.
According to MSN, a good example is a call center located in Kyiv, Ukraine, that specifically targets Canadians through various investment scams.
5. Bank Investigator Fraud
This is another type of fraud where attackers impersonate bank officials or law enforcement officers to manipulate victims into participating in fraudulent activities.
For this to happen, the attacker would likely call the victim, posing as an employee from the bank’s fraud department, and claim that the victim’s account has been compromised. The victim would be asked to assist in the investigation process and might send sensitive details or wire money or gift cards to the attacker.
CAFC reported 3,608 cases of bank investigator fraud, leading to 1,312 victims with $10.3 million in losses.
6. Merchandise fraud
This type of fraud is related to the sale of goods or products. The attacker’s goal is to misinterpret, falsely advertise, or use different tactics to defraud customers or businesses.
This could include fake websites impersonating legitimate companies; for example, according to CBC News, a fake Stetson Hats Canada website tricked Canadian buyers into thinking they were purchasing authentic Stetson hats. However, the hats never arrived, and victims lost money.
Another important example is when attackers manipulate search engine results to redirect users to fake websites that might closely resemble legitimate businesses or brands. CAFC reported 3471 cases with 2,836 victims, which resulted in $10.6 million in losses.
Fraud Prevention Strategies
The goal of Fraud Prevention Month is to raise security awareness of various types of fraud and educate individuals and businesses on how to stay ahead.
Here are some prevention strategies to mitigate the risk of fraud;
1. Educate Yourself
It is very important to educate yourself about fraud trends and engage in various cybersecurity awareness programs and tech events to learn new related trends.
My team and I started a cybersecurity awareness program called the Black Guard Summit to bridge the knowledge gap in information security within the black community.
There are other resources available about fraud prevention, including Canada.ca (the official Canadian government website, which provides comprehensive information on various aspects of fraud protection, identity theft, types of fraud, counterfeit money, and other threats or scams.
2. Use Strong Security Measures
To protect yourself from fraud, you need to understand the use of strong passwords, implement a password manager, enable two-factor authentication, keep software and devices updated, and use recommended antivirus software and firewalls for added protection.
Strong security measures also include limiting how you share information, shredding documents after use, monitoring credit reports for suspicious activities, and using a secure and encrypted network for file transfer.
3. Exercise Caution Online
Some best practices to prevent identity breaches include avoiding clicking on compressed links or links in unsolicited emails, keeping your access codes and passwords confidential, choosing your tax preparer wisely as they deal with sensitive information, and more.
I recommend reading our previous article on how to mitigate the potential risks associated with compressed links.
