Following a global trend of increases in suspected fraud attempts, fraudulent transactions are on the rise in Canada. Fraud affects Canadians across age groups and has significantly increased in 2023. A big part of this increase is considered to be due to the growth in digital transactions since the pandemic started.
The number of digital transactions in Canada has increased, as well as associated frauds. From 2019 to 2023, the rate of suspected fraudulent digital transactions increased by a staggering 105%. These numbers show that Canadians need to learn about how to identify fraud and how to keep themselves safe. If you’ve been the victim of fraud, there are measures you can take to limit the impact.
Rise in Payment Fraud in Canada
In 2022, the CAFC (Canadian Anti-Fraud Centre) received reports of fraud and cybercrime totalling $530 million worth of losses. To put it in perspective, 2021 saw an unprecedented $380 million worth of losses. The numbers for 2022 are a 40% increase from an already immense loss. To make matters starker, the CAFC estimates that only 5-10% of people even report the fraud to begin with. If $530 million worth of losses is around 10% of the total fraud that year, then this is only scratching the surface of a very troubling phenomenon.
To add to this, fraud cases have nearly doubled in 10 years, from 79,000 in 2012 to 150,000 in 2022. So, not only have the amounts increased over time but also the number of people who are being affected by fraud in Canada.
A recent Canadian study found that 13% of its respondents were affected by fraud in the last 6 months, as of July 2024. This means more than 1 in 10 Canadians who participated in the study were victims of fraud. Of this, the most frequent types of fraud were: unauthorized transactions at 38%, impersonator contact at 34%, and stolen credit card information used for unauthorized purchases at 18%. Another interesting discovery was that 29% of young Canadians were significantly more likely to experience authorized push payment fraud, compared to 2% of middle-aged and 6% of older Canadians.
Changing Payment Behaviors of Canadians
A recent study found that the rise in fraud has impacted payment behaviours and preferences for over half of their 1,500 respondents, at 54%. This is a worrisome statistic, as it can lead to far-reaching consequences.
For instance, around 22% of those surveyed were at risk of missing bill payments because of scam concerns. Payment-related communication often happens through text messages, telephone, or email – each of which is a channel for potential scams as well. Erring on the side of caution means people might end up being penalized for ignoring actual payment-related communication. Thirty-two percent of respondents struggled to identify which communications were legitimate and which were potential scams.
In 2023, 5% of digital transactions that originated from Canada were suspected fraudulent. This is a 39% growth in the rate of suspected fraud attempts, year on year, in 2023. This significantly outpaces the rate of suspected digital fraud YoY globally, which grew at 8% in 2022-23. In fact, looking at the increase in suspected digital fraudulent attempts over the years, there was a shocking 202% increase in attempts from Canada between 2019 and 2023.
Red Flags to Identify Fraud
Trust your instincts
The most important tip: Trust your instincts. If you’re feeling that something might be “off” at any point during an interaction or transaction, believe that instinct. You can absolutely stop a transaction at any point, and if you are unsure, proceed with caution till you can be certain. Don’t proceed with communication or transactions if suspicious at any point in the process.
Pay attention to detail
In any payment-related communication, be it email or text messages, pay close attention to the text of the message, who the sender is, and the links in those communications. Do not click on unknown links or respond with personal information to an unknown or unconfirmed sender. Digital banking can be convenient, but it is crucial to be aware of the rules, regulations, and processes.
Check website security and legitimacy
While doing online transactions, check the website you’re on. Sometimes, clicking on website links may take you to an unsecured website that may be set up to look like the one you want, or mimic the original one, but it may be a scam site. For example, sites that try to imitate government or payment portals. Always check the website link, legitimacy, names, logos, and security status before you provide any personal or financial information.
Use two-factor authentication to protect your information and logins. This adds another layer of security and makes it harder for a third party to access your information.
Keep your passwords secure
Do not share your passwords with anyone, or save it on your smartphone or notebook (35% of survey respondents claimed to do so). Generally, try to avoid your passwords being stored in any easily accessible place.
Do not use the same password for all sites (19% of survey respondents). Change them frequently. If any website you have a password for was the victim of a security breach, your passwords and information saved on that site are also likely to be visible to the scammers. In such cases, you should change the password you use on that portal, as well as any other websites you have used the same credentials or password on.
What to do if you’re the victim of a fraud or scam
- If you’re a victim of fraudulent activity, immediately report it to your bank or financial institution. The sooner you let them know, the sooner they can take preventive measures to secure your accounts and block further transactions. This helps decrease the impact on you as well as your institution., which may be covered by the Canadian Deposit Insurance Corporation (CDIC).
- Report suspicious sites to the Competition Bureau or the Canadian Anti-Fraud Centre.
- Provide relevant information about the fraud – the more you have the better. This can include names, numbers, email addresses, website links, or more. This information can help the authorities investigate.
- Contact the credit bureaus, like TransUnion or Equifax. You can check your updated credit report, and place an alert on your file for fraud. This will help you know if anyone does attempt to misuse your financial information, personal information, or identity.
- Increase your security measures by changing and updating your passwords, keeping an eye on your accounts, and being cautious in the future.
Key Takeaways
The rise in payment fraud in Canada is worrisome, and there are measures you can take to ensure your safety. Fraud cases have doubled in the past 10 years. Consequently, many Canadians have started to change their payment preferences and behaviours, putting them at risk of missing out on legitimate communication or payments.
To keep your personal and financial information secure, look for any red flags before you proceed with transactions or provide private information. If you’ve been the victim of payment fraud, there are steps you can take to mitigate the effects, like reporting it to your financial institution, credit bureaus, and the Canadian Anti-Fraud Centre.
If you’re dealing with debt and trying to stretch every dollar, fraud can be a devastating experience. Double-check everything before giving out information, and focus on strategies that can help you pay off debt quicker. Contact one of our trained credit counsellors for advice – they can help you figure out which debt relief program would be the right fit for your specific situation.
