How to spot a scam
The Better Business Bureau of B.C. is helping people avoid becoming the next victim of scammers.
An often the tip-off is the type of payment that is requested.
“Like many professionals, scammers work hard to get good at what they do. They keep inventing new, seamless and innovative ways to con people out of their hard-earned money and use payment methods that are difficult to trace. Unfortunately for scammers – and good for consumers – these payment methods have become red flags for fraudulent activities,” said Karla Davis, Manager, Community and Public Relations, Better Business Bureau.
“If someone tells you the only way you can pay is by wiring money, buying gift cards or cash reload cards, or obtaining cryptocurrency, you are probably dealing with a scammer.”
Davis says people should watch out for situations where you are asked to pay:
Money upfront for the purchase of a big-ticket item online;
A fee to receive a lottery or sweepstakes prize;
Application fees or taxes upfront before receiving a loan;
An overage from a cheque sent to you by someone who wants you to wire the difference to someone;
A charity by wiring the donation to them;
To help someone recover a large sum of money by sending money to them;
Money immediately to help a loved one who claims to be in trouble;
Or give money to someone you met online after you start to feel a connection;
To save your Social Insurance number or to obtain other government services;
Back taxes or otherwise be arrested;
To clean up your computer after someone you have not met in person claims they found a virus;
A third party who will hold money in escrow while you complete a purchase from someone you have never met in person.
“Regardless of the scenario – whether it is someone telling you to pay to claim a prize, help someone out of trouble, or deal with tax issues from the CRA – nobody legitimate is ever going to say you have to pay by wiring them money or using gift cards,” said Davis.
Scammers often choose gift cards, reloadable cards, transfers through a company like Western Union or MoneyGram and cryptocurrencies such as Bitcoin because they are difficult to trace and easier to deal with online than cash. Some online scammers still rely on credit cards for payment as consumers have become comfortable using them for online purchases. The good news for consumers is that many credit card companies offer protection for fraudulent transactions.
The FBI has also indicated that payment-in-kind is one of the payment preferences that is growing increasingly popular. An example of payment-in-kind would be accepting 10 new iPhones (or any other expensive item) in the mail, forwarding on nine to another address, and keeping one as payment.
In 2018, BBB received over 50,000 reports on Scam Tracker, with over 30 percent identifying the type of payment involved in the scam. The top three methods consumers reported were gift cards, wire transfers and credit cards.
BBB offers the following tips to consumers:
Do not pay using a gift card. No reputable company will ask for payment using a gift card. If you receive a call demanding that you must pay using a gift card, just hang up. Scammers use scare tactics by threatening you with jail time unless you pay immediately.
Never wire money to someone you do not know. Also, do not wire money to a charity. There will be no record of the donation, which is needed for tax purposes. It is likely a fake charity posing as a real one.
Report your experience. If you believe you have been a victim of gift card fraud, report it immediately to the company that issued the card. It may not be possible to stop funds from being withdrawn, but the company should be alerted to the fraud.
When possible, pay using a credit card. If you suspect fraudulent charges, report them immediately to the financial institution that issued the card.
Look out for CRA impersonators. The CRA never requests one method of tax payment and provides information about tax payment options here.
File a complaint about any consumer fraud to BBB’s ScamTracker and with the Canadian Anti-Fraud Centre.