Financial fraud in Canada: What to do if your bank account or your credit card is compromised

Introduction to Interac e-Transfer Safety

Interac e-transfer is generally a safe way to send money in Canada. According to Interac, for every $100 million in transactions in the Interac ecosystem, about $0.03 is lost to fraud. This low rate of fraud is a testament to the security measures in place to protect users. However, despite these measures, fraud can still occur.

Types of e-Transfer Frauds in Canada

Fraudsters often use text or email channels to scam victims. Some common examples of fraud in Canada include:

• Tax Refund or Government Relief Scams: A fraudulent "deposit" of income tax refund or government financial support is made available.
• Lottery Scams: The fraudster asks for sensitive information or an advance payment of an administrative fee.
• Rental Frauds: Someone pretends to collect rent on behalf of their landlord or offers a nice apartment at a low price and asks for a deposit to secure it.
• Fraudulent Sales: Someone asks for an advance payment for a hard-to-find or rare item via an online marketplace and then never sends the item to the buyer.
• Relationship Frauds: Someone claims to have a family member, colleague, or romantic interest and asks for money for an emergency.
• Work from Home Scams: An applicant is asked to pay for supplies, training courses, or other work-related costs for a fake job.
• Hacked Email Accounts: Fraudsters find emails with security questions and answers, then take off Interac e-transfers and divert the funds to their own accounts.

How Fraudsters Access Your Account

If fraudsters were able to send transfers directly from your account, it sounds like they could have hacked into your online banking. This may have been facilitated by a phishing text, email, or website that tricked you into entering your bank login information, thereby giving the fraudsters access to your account.

Protecting Yourself from Identity Fraud

Equifax Complete Protection is a loan and cybersecurity protection service that helps Canadians recognize the signs of identity fraud faster. It offers:

• Daily credit monitoring and alerts
• Scans for your personal data on the dark web
• Social media monitoring by industry leader Zerofox
  The subscription price is $34.95 per month.

Reporting Bank Account Fraud

If you are a victim of fraud, the Canadian Anti-Fraud Centre (CAFC) recommends the following steps:

1. Contact Your Financial Institutions: Place flags on all of your accounts, including other financial institutions, and change your passwords.
2. Contact the Police: Report the incident to the police and keep them updated on further developments.
3. Report the Incident: Contact Canada’s two credit bureaus, TransUnion and Equifax, and consider credit monitoring, which reports suspicious credit activities. You should also contact the CAFC by phone at 1-888-495-8501 or use its online fraud report system.

Bank Responsibility for Unauthorized Transactions

Each financial institution can have different definitions of what constitutes an unauthorized transaction. You must check your debit card or credit card agreements to understand the conditions that may limit the financial institution’s responsibility. According to the Financial Consumer Agency of Canada (FCAC), you may be responsible for losses if you:

• Use your date of birth or telephone number as a PIN
• Share your card or PIN with someone, including a family member
• Keep a written record of your PIN near the card
• Do not report your card as lost or stolen within the time specified in your card contract
• Refuse to cooperate when investigating unauthorized use
• Make fraudulent deposits with your card
• Do not take the necessary steps to protect your PIN

If you are not satisfied with your bank’s response, you can contact the Ombudsman for Banking Services and Investments at 1-888-451-4519. You may also want to consult with a lawyer specializing in bank fraud disputes to see if they can assist you. An initial consultation can confirm whether you have a case or what further steps you can take.

Conclusion

While Interac e-transfer is a safe way to send money in Canada, fraud can still happen. Being aware of the types of fraud, taking steps to protect your personal and financial information, and knowing how to report fraud are crucial in minimizing risks. Remember, vigilance and prompt action are key to preventing and addressing fraud. By understanding your responsibilities and the measures in place to protect you, you can confidently use Interac e-transfer and other financial services.