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Financial Fraud 101: Common Financial Fraud Targeting Canadians

Updated: May 29

Your financial well-being is always our priority here at DO Wealth, and with Canadian-based fraud rates rising 39% in 2023 (from 3.6% in 2022), we’re working harder than ever to help keep your assets safe. To do our part, we want to bring you some insight into different types of fraud schemes out there and the tools and information we can arm you with.

A snapshot of financial fraud

There are many strategies scammers use to carry out their tricks, and often they play on emotions such as fear, greed or a sense of urgency to pull their victims into the fray. Here’s a quick rundown of some common ones:

  • Spoofing: These are malicious emails (phishing) or text messages (smishing) pretending to be from a legitimate source, such as your financial institution or DO Wealth, and they may ask you to confirm sensitive information such as passwords or account numbers.

  • Ponzi Schemes: A scam offering supposedly risky investments with unbelievably high returns, paying prior investors with funds from new investors. These schemes are inherently unsustainable and will inevitably fail.

  • Investment Fraud: A broad scam category including “pump and dump” (a stock scheme that involves artificially increasing a stock’s price), affinity fraud (a type of fraud where scammers build trust with their victims by aligning themselves with certain groups or communities), or promises of outrageously high returns.

  • Identity Theft: This is when a criminal obtains personal information such as your SIN number or credit card details to use to their advantage, often to open new accounts, take out loans or make purchases.

Some warnings to be aware of

  • Unexpected contact: Don’t respond to emails, text messages or calls requesting personal or financial information, even if they appear to be from a legitimate source.

  • Urgency: A scammer may try to rush you into a decision, making it difficult for you to think the action through.

  • Promises of certain returns: Think twice before investing in an opportunity that boasts of low risk and high returns; all investments have some risk involved.

  • Advance payment requests: You will never be asked for payment before receiving goods or services from a legitimate business.

  • Out of the ordinary requests: If something seems unusual or out of place, it probably was. Always double-check information with another source.

How Can You Avoid Falling Victim to Fraud

  • Guard Personal Information: Protect your SIN, passwords and other personal information. Do not post them on the internet or share them with others over the phone unless you initiated the contact and trust the person you’re speaking with.

  • Think Before You Click: Don’t open any links in unsolicited emails or text messages. Create strong, unique passcodes for your accounts and use the security features offered by your providers, such as two-step verification.

  • Secure Your Devices: Equip your computers and gadgets (mobile, smartwatches, etc.) with good antivirus and anti-malware programs. Keep them updated and be wary of downloading files from emails, texts and unknown sites.

  • Monitor Your Accounts: Keep tabs on your bank and credit card accounts to quickly detect any unauthorized activity. You can obtain a free credit report from each of the major credit reporting organizations at least once a year.

  • Do Your Research: When approached to make a donation to a charity, or when dealing with a collection agency or company, ensure that they are legitimate.

  • Report Suspicious Activity: If you think you have been the victim of a scam, contact the Canadian Anti-Fraud Centre as well as your bank, credit card company or financial institution right away.

DO Wealth is Here for You

Here at DO Wealth, we’re here for you and your money. If you have any questions or concerns regarding fraud, please reach out to an advisor. We are happy to educate and assist you in any way possible.

By keeping yourself informed and taking the necessary precautions, you can help avoid becoming a victim of fraud. Let’s work together to keep your finances safe.

Always remember: If it seems too good to be true, it probably is. Trust your gut and always double check any information you receive independently before acting on it.


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