Recognize rip-offs. Skewer scammers.
The best way to protect yourself from being conned is to be familiar with the types of frauds and scams out there. Here are a few to beware of.
Cheques… remember those? Those rectangular pieces of paper can be used against you by someone who steals them and alters them without appropriate authority. They can also use false invoices to solicit legitimate cheques. They often deposit a cheque into a third party account without authority.
How to protect yourself:
- Keep all your cheques in a secure location when not in use.
- Be careful when signing cheques. Never sign blank cheques; only sign after all details have been completed. Leave no gaps in the completion of the payee name, amount in words and in figures. Avoid use of acronyms for payee names. Use permanent ballpoint or ink (preferably black). Limit the number of signatures to your account to ensure control. Ensure any spoiled cheques are destroyed.
- Reconcile your accounts promptly and regularly.
- For business accounts, separate the cheque writing/electronic payments and account reconciliation functions. Consider opening a separate account specifically for higher-value cheques, so they can be easily monitored. Consider implementing a 'two to sign' policy.
Advance fee fraud.
Advance fee loans operating for a criminal purpose generate millions of dollars annually in Canada. Fraudsters posing as reputable financial companies advertise instant loans while Ponzi schemers offer high interest rates on investment opportunities. Both usually request an up-front fee. If you send your money to them, it is unlikely you will get your promised loan and your advance payment will be at risk.
Individuals with poor credit ratings are usually key targets for ‘easy money’ loan scams and once the 'loan processors' receive the money, they usually disappear. Unwary investors are the targets for Ponzi scams.
If you have doubts about any organization, contact the Better Business Bureau for further information.
Online Auction or Sales Fraud.
Online auction fraud includes fraud due to the misrepresentation of a product advertised for sale through an Internet auction or sales site, the non-delivery of an item purchased or a non-payment for goods purchased through an Internet auction site.
To steer clear of these situations, consider these tips:
- Deal with companies or individuals you know by reputation or experience. If you aren't familiar with the company, do your research. Find out their address and phone number. Don't do business with a company that doesn't list a physical address or telephone number on its website.
- Read the terms and conditions of the contract to make sure you understand the delivery options, return policy, and product or service warranty. For international transactions, ask for information about the exchange rate and any applicable duties and taxes.
- Ensure the business has a fair and clear process for submitting complaints and/or cancelling orders.
- Make sure transactions are secure. Do not enter any financial information if you see a broken-key or open padlock symbol on your Internet browser. This means that the transaction is not secure and could be intercepted by a third party. When the key is complete or the padlock is locked, your browser is indicating a secure transaction.
- Remember, e-mail messages are not private, unlike secure order forms on a Web site. Don't send confidential personal or financial information by e-mail.
- Talk to your children about online activities. Instruct them to keep their personal information private unless you approve.