Congratulations! You won the lottery!
And just in time.
Your grandson called. He’s in jail and needs money fast. He’s scared and doesn’t want you to tell his parents.
So, you dip into your savings and wire him the money. You then pay the taxes or insurance fees you’re told to pay on the lottery winnings to collect the money.
It’s all fine because your grandson promised to pay you back. And, let’s not forget that you’re richer than before.
Two problems. Your real grandson isn’t in jail and you didn’t buy a lottery ticket.
Even if you did buy a ticket, you don’t have to pay anything to collect lottery winnings.
You’ve been scammed twice.
March 1 marked the beginning on Fraud Prevention Month, and as per usual, the Better Business Bureau also released its top-10 list of most frequently reported scams in time for that date.
The connection to personal finance is somewhat obvious – if you’re not being conned out of your life savings, then you have life savings.
Both scams just mentioned are classic, but neither made the Better Business Bureau’s list – likely because they’ve been pushed aside by technology-based online purchasing, online dating and cryptocurrency scams.
One that bilked Canadians out of $4.3 million in 2016 was the Canada Revenue Agency scam. It’s trending downward to the point that it didn’t make the 2017 list.
But it’s definitely still around. Just ask Peter Moorhouse, president and CEO of the Better Business Bureau in Halifax, who recently got a phony Canada Revenue Agency call.
During a chat last week, Moorhouse explains the CRA scammers are trained to be as aggressive, threatening and intimidating as possible. The scammers also tend to use a spoofed 613 Ottawa area code to make the call look legit.
But the word is getting out, which is why the CRA scam didn’t make this year’s list.
So, what is on it?
Online purchase scams top the list. Canadians were conned out of $13 million in 2017.
This dispels the myth that only seniors are victims of scams. In fact, more young folks (ages 24-34) are getting bilked because they tend to be online more using credit cards.
I’ve never been scammed.
And even if I had been, I wouldn’t tell you. This is a reason why the number of reported incidents is lower than the actual number – people are often too embarrassed to admit they’ve been conned out of money.
Other scams to make the 2017 list are wire fraud, income tax scams, miracle weight loss scams, advance fee loans, shady contractor services and fake invoices.
One thing they all have in common is they go after your nest egg.
The one that stands out for Atlantic Canada is fourth on the list – employment scams, such as “shady work from home” opportunities, says Moorhouse. You send them money. They send you a cheque, which you deposit – only to find out later on that it bounced. Now, you’re scammed out of money and you don’t have the job you thought you had.
So, what can you do to protect yourself from these scams?
Moorhouse has some advice.
One is to be cautious of sales pitches or calls that put pressure on you to make a hasty decision to send money. Those calls should set off alarm bells. Another tip is to talk openly with your family about scams. It isn’t only seniors that are targets, but as already mentioned, also the 24 to 34 age group.
The most important piece of advice is the one we hear most often – if it seems too good to be true, it probably is.
Words to live by.
Terrence McEachern is a business reporter with The Guardian in Charlottetown, P.E.I.