How to Avoid Loan Scams in Canada 2020?

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How to Avoid Loan Scams

An imposter scam alert is a necessity these days because of the steady increase in the number and types of fraudulent activity that is reported. Each day, unsuspecting victims have their identity or money snatched before they are even aware that they have given personal information or cash to a not-so-great pretender. These criminals are successful at fooling so many people because they are astute at imitating legitimate businesses or people.

One reason that fraudsters have a high rate of success is because they are able to rush people into making decisions. Scammers usually run a con so fast that the victim doesn’t have time to think or ask questions. However, it is possible to reduce the chances of becoming a victim to an imposter scam with advance knowledge about how they work. 

Loan Scams

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How Scams Work

Imposters count on the element of surprise to make their ruse successful. They assume that victims will not be suspicious, especially if they pretend to be a friend or relative in need of help. In general, the average person has to always assume that any request for money or information from an unknown person is a potential scam. It is not possible to be too cautious since scammers use such a variety of scenarios to trick people.

In some of the most common imposter scams, the caller claims:  

    • to be a government entity collecting taxes or other debt

    • they are a legitimate charity asking for donations

    • computer or other tech equipment has to be serviced

    • a utility or other bill is overdue and must be paid immediately

    • the victim’s bank or credit account has been compromised and information is needed

    • the target has won a prize or money and a fee is required to collect it

There’s no end to the devious means criminals employ to snare victims, which is why suspicion should be the first reaction to an unsolicited call. It is imperative that the person or so-called company is immediately verified if they ask for money or information. That means – get off the phone or close the email and confirm the validity of the information. It is always better to be cautious than put finances or information at risk.

Imposter Scam Statistics

Fraudulent criminal activity impacts every citizen on the planet in some way or another. Imposters usually target vulnerable people like the elderly, disabled or young. However, anyone can and has been a victim or intended victim. And those that have not been directly scammed are affected by these crimes in the form of higher insurance rates, loss of trust and peace of mind, in addition to other consequences.

The Federal Trade Commission (FTC) is a U.S. government consumer protection agency. Every year, the agency reports scams spotted by individuals and businesses during the previous year. 

In 2018, the FTC received 3 million reports of fraud activity.

Identity theft, debt collection fraud, and imposter scams were the top crimes in the report, which included:

  • Participants reported a loss of close to $1.5 billion to fraud, an increase of 38% from 2017.
  • People over 70 years of age had a tendency to lose more money in fraud schemes than younger adults.
  • Credit card fraud using stolen identities to open new accounts was the most highly reported form of identity theft in 2018 (up 24% from 2017).
  • Loss from wire transfer scams totaled $423 million.
Credit Card Scams

This small sampling of data reflects the alarming numbers of imposter fraud and scams reported around the globe. Despite that being said, this activity cannot go unchallenged. Is it possible to eliminate all imposter fraud in all its forms? Probably not all scams, but the numbers should inspire a surge to fight back to the extent possible. 

Be Watchful

Criminals invest tons of time and energy honing their deceitful tactics. Even so, it is not healthy to become obsessed with fear about imposter scams. One way to strike a balance between the two is be aware of the signs of a possible scam. Some warning signs are:

  • A stranger asks for a purchase to be paid with a gift card or money transfer. This often happens when people make online purchases. 
  • A credit card or bank asks for personal information like a PIN or social security number. Genuine companies do not call or email requesting information.
  • Emails asking for money or information that look like they’re from a legitimate company (like PayPal, for instance) but have grammar or spelling errors.
  • An online seller gets a payment from a buyer with a check that is more than the purchase price of the item. The scam buyer asks the seller to deposit the check and wire the extra money.
  • Requests for “fees” to receive money from an inheritance, winning a sweepstakes, or other windfall.
  • Threats to call the police or a jail sentence if a bogus bill is not paid.
  • An older adult gets a phone call from a young person pretending to be a grandchild. The caller claims to be in trouble and needs money but asks that their parents not be told. 

Any request for money and information should be verified before sending one dime. If the caller balks at waiting until the company or individual is called, it is a scam. Yes, it is prudent to stay alert, but the possibility of being fooled by imposters still remains. If it does happen, the only recourse is to learn what steps to take to report the incident.

Reporting an Impostor Scam

There are certain steps that should be taken immediately after an imposter scam is discovered. Once these steps are completed, the victim can let other people know what happened so they too can be on the lookout. But first, it is imperative to complete the following:

  • Stop all credit activity by making a report to all credit reporting agencies.
  • Notify banks and any affected credit card companies.
  • Change all internet passwords including email, social media, apps, and all business accounts.
  • Update computer security software and run a scan.
  • Gather all evidence of the transaction such as phone numbers, emails, texts, and receipts. Write down any part of conversations that can be helpful to authorities.

People posing as a reputable business, the government, or a family member are a danger to society. Reporting a scam operation could save someone else from financial disaster or even worse. In the United States, reports can be made to the Federal Trade Commission, the local police, and the actual company the scammer was impersonating.  

One place to report scams in Canada is the Canadian Anti-Fraud Centre. This organization works with law enforcement agencies to make connections in fraud cases that may be related. Canadians should also make a report with their local police department to get the incident on the record.

The majority of people in the world are law-abiding citizens who live life without causing harm to others. It is this community of people who will remain vigilant and spread the word about fraudsters and their tricks to others. As many more scams and the criminals behind them are exposed, it is the imposters who will need to be on alert.

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Sheila Kay

Sheila Kay is an author, ghostwriter and editor residing in the Atlanta, GA area. Among her favorite writing genres are creative nonfiction, self-improvement, and finances. Her first published book, PTSD and the Undefeated Me, is a memoir which has been a stepping stone to her involvement with mental health advocacy for military and civilian men and women. She is currently working on the first fiction novel to be published under her name. For more information or to purchase her books, visit Sheila’s Author Page on Amazon.com.

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