Spotting Fraud & Scams: How to Protect Yourself and Safeguard Your Finances

Spotting Fraud & Scams

Every year, thousands of Canadians lose millions of dollars to fraud. These scams can take many forms, including investment fraud, phony door-to-door sales calls, threatening and sometimes alarming telemarketing scams, and even online fraud.

Seniors are particularly vulnerable. In fact, according to the Government of Canada, fraud is the number one crime against older Canadians. Keep reading to learn more about how you can protect yourself, and the ones you love, from falling victim to fraud.

Fraud is the number one crime against older Canadians.

Investment Fraud

Simply put, if you have money to invest, you can be vulnerable to investment fraud.

However, you do not have to necessarily be wealthy to become a victim of a scam. In fact, according to Canadian Securities Administrators, one-third of fraud victims are scammed for less than $1,000, and another 28% are taken for between $1,000 and $5,000. Once you fall victim to investment fraud, it can be very difficult to get your money back.

According to the Ontario Securities Commission, one common theme of investment scams typically involves getting you to put up money for a questionable investment – or one that does not exist at all. Scam artists usually begin by asking personal questions about your health, family or hobbies, which they then use to refine their sales pitch, tailored to your specific situation.

Most investment scams are built on trust, and victims can be approached in a number of ways:

  • Through a group they belong to;
  • Via investment seminars; and
  • Through unsolicited emails or phone calls.


Types of Investment Scams
There are several types of investment scams in Canada, ranging from affinity fraud to Ponzi schemes, and it can be challenging trying to distinguish between what is legitimate, and what is significantly more dishonest.

The Canadian Anti-Fraud Centre lists the following warning signs you should look for if you are unsure if a particular investment is a scam. These signs include:

  • Talking about an investment opportunity with higher than normal returns;
  • Talking about an investment opportunity made over the telephone;
  • Displays of urgency to make an investment, they don’t want to miss out;
  • Clients have done limited due diligence and have little knowledge about the investment;
  • Clients that don’t have a contract or agreement about the investment;
  • Making unusual withdrawals both in amounts and frequency; and
  • Making large dollar wire transfers to foreign countries for an investment.

For a more detailed look at the various types of investment scams in Canada, click here.

How Do I Avoid Investment Fraud?
The best way to avoid investment fraud is to become an informed investor. This involves knowing your investment goals, what you are investing in, who you are dealing with, and who to call for help. Work with a trusted advisor who is registered with your local securities regulator, and who you believe is trustworthy.

Read more about choosing an advisor here, or download the Canadian Securities Administrators’ brochure on working with a financial advisor here.

For more information on investment fraud, be sure to also download the Canadian Securities Administrators brochure, which will help you learn more about recognizing and avoiding fraud and scams.

Door-To-Door Scams

Fraudulent door-to-door sales calls are another reason why many Canadians lose thousands of dollars each year. Keeping your door closed, and not allowing an unsolicited salesperson into your home is the best way to protect yourself. To learn more, watch this helpful video from the Durham Regional Police Service.

It is also important to keep the following in mind if you receive an unsolicited sales call to your door:

  • Fixing something? If someone appears at your door and claims to be there to fix something, ask yourself – did you request this house call? If you did not request it, this is most likely a scam. Do not let them in.
  • Collecting for charity? Always ask for identification when you are approached to donate to a charitable organization. When in doubt, contact the charity and verify with them directly.
  • Information collection? Never provide your personal or financial information to an unsolicited salesperson at your door.
  • Buy something? Most Ontario school boards discourage students from selling items door-to-door. If you are in doubt, check with the school board directly.
  • Sign for an offer? Do not sign any papers on the spot. Always contact the company directly to verify any claims.

Door-to-Door Energy Contracts

If you receive a knock at the door and it is an energy company salesperson asking you to sign or renew a gas or electricity contract, it is important to know who you are dealing with. The Ontario Energy Board lists the following four things to remember if you are approached to sign an energy contract:

Four things to remember if you are approached to sign an energy contract:

  • As of January 1, 2017, no one can sign you up for an energy contract while they are at your home. They can leave information, but are not allowed to leave a contract;
  • Always make sure you get a business card and look at the salesperson’s ID badge first;
  • Don’t share personal information (i.e. your gas or electricity bill). An energy retailer only needs this information if you decide to enter into a contract; and
  • Energy retailers are not your utility company, the government or the Ontario Energy Board (OEB). The OEB does not go door to door

If you do sign a contract for things like water heaters, furnaces or air conditioner units, Consumer Protection Ontario states that as a consumer, you:

  • Have the right to cancel a contract for any reason within a 10-day cooling-off period. For water heater contracts, there is a 20-day cooling-off period; and
  • Must get a written contract: under the Consumer Protection Act, a consumer contract has to include specific information about the goods or service and your rights as a consumer. If it doesn’t, you can cancel the contract within 1 year of signing.

Learn more from Consumer Protection Ontario here.

For an informative video, and to read more from the Ontario Energy Board, click here. Multilingual consumer information can be found here.

Telemarketing Scams & Online Fraud

Telemarketing Scams

According to the Canadian Anti-Fraud Centre, telemarketing scams trick people out of their money and personal information by developing elaborate stories and scenarios to make you believe they are legitimate.

Telemarketing scams range from emergency and investment scams, to prize, vacation, and tax scams. One of the most common types of telemarketing scam is the is CRA Tax Scam – where suspects pose as representatives from the Canadian Revenue Agency and contact victims with regard to allegedly overdue taxes. This helpful video from CRA explains this scam in detail. It is important to note that the CRA will not contact anyone who owes taxes in this manner.

To read more about the different kinds of telemarketing scams in Canada, click here.

Online Fraud

The internet is a powerful tool that connects people and spreads ideas throughout the world. It has the power to bring education, companionship, banking and shopping directly into your home, but unfortunately, it can also bring unwanted fraudsters and scam artists as well.

The Canadian Anti-Fraud Centre lists the following tips to protect yourself online:

  • Do not reply to any email that requests your personal information;
  • Contact your financial institution immediately and report your suspicions;
  • Check for the embedded hyperlink in the suspicious email by hovering your mouse over the link to verify the address;
  • Do not click on any attachments; they can contain viruses and spyware;
  • Beware of unsolicited emails from individuals or organizations prompting you to click on an attachment or link; and
  • Contact Equifax and Transunion to place fraud alerts on your name if you suspect you are a victim of identity theft.

Online scams can range from identity theft and extortion, to loan scams and credit card fraud. To learn more about these scams, click here.

Resources For Seniors

As previously mentioned, the Government of Canada states that fraud is the number one crime against older Canadians. Some of the reasons offered as to why older people are targeted more than others include:

  • They are often home during the day to answer the door or phone;
  • They can be more trusting; and
  • They may not have family or friends close by to ask for a second opinion.

One of the most common scams that target older Canadians is called the Grandparent Scam, where somebody claiming to be a relative calls in “distress”, claiming they have been arrested or have been in an accident and need money. To watch a video explaining this scam in detail, please click here.

The following links contain additional resources specifically for seniors, including how to protect themselves from financial abuse, fraud and scams.

If you have any questions about fraud, think you may be a victim of fraud, or are concerned about your financial well-being due to a potential scam, call 2-1-1 or search to find a list of community resources to report fraud and that might be able to help.

Recent Articles

211 Day 2022 – 211 Ambassador Kit

211 Day Summary February 11th is 211 Day across North America – a day we collectively raise awareness about the 211 service through 2...

Community & Social Services

How 211 helps: real caller stories

When people are isolated or in crisis, finding the right help can seem impossible. There is so much information available - thousands of ...

211 Caller Stories

Job advertisement – O211 Services, Chief Operating Officer

211 is a free and confidential service that easily connects people to the critical social and community supports they need. Whether it’...

Community & Social Services