5 financial scams that look too damn real

For this week’s top story, we’re uncovering five very sneaky scams to steal money, identities, credit information and more.

Remember the days when you could spot a scam before you opened an email, answered the phone or looked at a text? The good ol’ days are gone. “The reality with scams is that the manipulation happens long before the payment,” says Ayelet Biger-Levin, founder of the ScamRanger scam prevention app. “It starts at the point of initial contact between the criminal and the consumer.” That’s when they start building trust and taking advantage of consumer assumptions.

It can be easy to recognize that first fraudulent contact when it’s a “Dear sir” email about an offshore inheritance or a phone call from a country you have no connection to. But when the scam starts with familiar things like QR codes in public spaces or one-time passwords, or tickles our financial pleasure centres like a high-return investment or an overpayment for something we’re selling, they can be trickier to spot.

That’s why identity fraud and investment fraud are big business in Canada—two of the most reported frauds, according to the Canadian Anti-Fraud Centre (CAFC). Here are some ways scammers are bending reality to take your data and money, and how you can avoid their traps.

Fake QR codes

Anyone can generate a quick response (QR) code online with a few clicks, often for free. Sometimes scammers send them in emails or texts that claim to be from financial institutions or government agencies. And QR code scams are evolving into physical spaces too (keep reading). When a QR code is used maliciously, it  can help a scammer install malware or steal your personal data and banking info.

Biger-Levin, who also hosts the Scam Rangers podcast, says you shouldn’t use QR code prompts you don’t expect to receive or which aren’t from an organization’s official website.“Make sure it’s legitimate,” she says, by  double-checking the domain name, for example. Scammers often use domains with small spelling differences from the official ones, like a zero instead of the letter O.

Fake QR codes are also appearing in physical locations, like on parking meters. Last year, several Canadian cities warned residents of QR code stickers which directed users to malicious websites. Whenever you see a QR code, slow down. QR means quick response, but if the code raises red flags, use a different way to transact, even if it’s a little less speedy.

Overpayment scams

Any Canadian who’s sold something through an online marketplace may be accustomed to lowball offers, but one type of too-good-to-be true scam involves a scammer paying more than the asking price. In this scam, the payment is often by cheque or money order. 

After the victim has accepted the payment, the scammer will say the overpayment is a mistake and ask for a refund, or they say the excess payment was meant to go to a third party, like a fake shipping company. The scammer’s goal is for you to part with that partial refund or the item (or both!) before you realize the payment is fraudulent. 

Preventing this scam is straightforward. The Canadian Bankers Association says you should always be wary of overpayers—request a certified cheque if they insist on paying with paper or flatly refuse overpayments. Waiting for a cheque to clear isn’t enough—banks may release funds within days as a courtesy, but fraud verification can take weeks, and you’ll still be on the hook.

High-return crypto and investment scams

Among Canadians who report fraud, the most money lost is to investment fraud. Kelly Ho, a certified financial planner and partner at DLD Financial Group, says she’s heard promises of 20% returns—with no risk. Heck, everybody would be wealthy if that was true!

The claims are frequently outrageous because if promised returns are “boring,” people won’t be enticed to change their investment habits, Ho says. That’s why it’s important to ask for a trusted and qualified second opinion and to do your research.

While some people are dazzled by opportunities that may exist in crypto, forex, and now AI investments, there are a lot of scams in these arenas. Ho has clients who have made money in Bitcoin, but it’s important to distinguish between high-risk investments that are “volatile but legitimate, versus a scam where someone runs off with the money,” she says. “There’s high risk, and then there’s a scam. There’s a difference.”

One-time password scams

This extra security layer has become a common part of accessing different accounts, whether social media accounts, workplace emails or online banking. But sometimes scammers use this technology to scam you.

Biger-Levin says one she’s noticed scammers sending messages with a one-time pass code. Her advice: if you didn’t request a code, don’t use it or call any number in the message. It’s probably a phishing scheme, designed to get information such as logins or personal details.

“When you call that number, there’s a criminal waiting to scare you into believing that something is wrong and someone is trying to hack your account. They’ll ask for all these details—and that’s the scam.”

Account update scams

With this type of fraud, you get contacted by a seemingly legitimate entity—the payroll department at your workplace or the Canada Revenue Agency (CRA)—with a request to update personal information. But you’re actually communicating with scammers who then use the information to access your banking.

Other times, scammers impersonate you and ask your employer to update your direct deposit information, then sit back and wait for your next paycheque. This is part of a wider set of frauds known as business email compromise scams.

A good rule of thumb is always to double-check by calling or emailing CRA, the head of payroll, or whoever may have contacted you, using the official contact info you already have on hand. Never use a different email or phone number that scammers include with their message.

What if I get scammed?

You aren’t alone. Because only 5% to 10% of frauds get reported in Canada, it’s  not known precisely how wide-reaching the problem is. But since 2022, Canadians have lost at least $2.4 billion to fraud, according to the CAFC. Report scams to the CAFC at 1-888-495-8501 and your local police.

There’s no guarantee you’ll get justice or your stolen money—and that’s all the more reason to become increasingly cautious as scammers create increasingly convincing ways of stealing money and data.