Online Scams and Fraud

The Internet is a useful tool for us to learn new information, stay in contact with friends, shop, play games and more. However, its growing popularity means that a greater number of individuals are trying to take advantage of unsuspecting people online. By educating yourself on the tactics used by these individuals, you can help keep yourself safe from online scams and fraud.

Identity Theft

Identity theft occurs when someone wrongfully obtains and uses another person’s identifying information for the purpose of fraud or other criminal activity, typically for economic gain. If someone obtains personal information like your date of birth, address, social insurance number and employment information, they can use this information to impersonate you by:

Applying for and obtaining credit cards in your name (without you ever knowing)
Taking over your financial accounts or creating new ones
Transferring your bank balance
Applying for loans
Purchasing goods and services
Obtaining passports, visas, and other important documents

The repercussions can last for years. If someone obtains a credit card in your name, it can affect your credit for up to ten years! This will make it next to impossible for you to get any kind of financial loan, to buy a car or to obtain a mortgage when you’re ready to buy a house.

To help minimize your risk of identity theft, think carefully before sharing any information online. If it seems odd that you’re being asked for certain information, don’t give it out! If you’re using online banking or other sites with confidential information, don’t do so from computers in public places and make sure you sign out when you’re finished. This makes it more difficult for other people to steal your information.

Phishing

“Phishing” involves illegally obtaining information through spoofed (falsified) emails that appear to belong to a legitimate business (eg. banks, online auction sites). These emails redirect the person to a spoofed website appearing to be from the same business. The website will ask for personal information such as account numbers and passwords. If the person enters the information, it goes directly to the people responsible for the scam.

A legitimate business will never ask you to give them your password or personal information that is irrelevant to what you are doing (like your Social Insurance Number). If a site asks you for this information, it is most likely part of a phishing scam.

Online Shopping

Making purchases online is a quick and convenient way to buy the items you want. However, you need to use common sense and take precautions to protect your personal information. Here are some tips for shopping online safely:

1. Evaluate the seller

Make sure the seller is well-known: You don’t have to worry as much about getting scammed if you’re dealing with a reputable store or online retailer (such as amazon.com or chapters.ca).

Research the seller’s credibility and reputation:
- If you are buying from an online auction site (such as eBay or iOffer), take a look at the seller’s feedback and the comments left by previous buyers. This can give you a good idea of what it is like to do business with the seller.
- If you are buying from an online store, you can search the business on the Better Business Bureau website to see if any complaints have been filed against the company or if it is a member. Note that many online companies are located in the United States and you will have to search them using the American Better Business Bureau site.
- You can also try searching the business on consumer review websites to see if other customers have left comments.

Watch out for signs that the business is not legitimate:
- The business operates through a free web service like Geocities or Tripod instead of using its own domain name.
- There is no physical address or phone number listed for the business.
- The website is poorly designed and contains missing or broken links.
- The sales, return and privacy policies are not clearly set out.

Check the sales, return and privacy policies: This information should be available on legitimate sellers’ websites. Make sure you understand the shipping methods and costs, methods of payments accepted, and the process/fees involved in returning a product. You should also look into the company’s privacy policy: make sure they will not sell your information and that your personal data remains private to the seller.

Source: RCMP – Personal Information and Scams Protection – a Canadian Practical Guide

2. Complete the transaction safely

Use a credit card wherever possible: If you use a credit card, you can file a dispute with the credit card company if you do not receive the item you purchased or if what you receive is not what you ordered. If you send a check or money order, you have no way to get reimbursed if you do not receive the item you ordered. NEVER use a debit card – if the seller is not legitimate or gets hacked, your debit card number could give others access to your bank accounts.
Update your virus protection and firewall before purchasing: Make sure that your computer is protected to help keep your information safe when you’re shopping online.
Do not enter personal info in pop-up screen: Identity thieves can create realistic-looking pop-up screens that are not affiliated with the site you are attempting to make a purchase from. Legitimate companies should not ask you to enter personal or financial information in pop-up windows.
Make sure the transaction is secure: Only make payments through websites that are secure, and NEVER send your credit card number in an email – anyone can access information sent in an email! The web page where you enter your financial information needs to be a Secure Socket Layer page (SSL), which encrypts the information you enter so that others cannot see it. These web sites should have a URL starting with “https” instead of “http” when you go to make a payment. They should also have a closed padlock or key in the bottom right corner of your browser.
Keep a record of the transaction: Print out the purchase confirmation and the contact information of the company in case you need it later.
Check the product when it arrives: As soon as you receive it, check to make sure that you actually received what you ordered and that it is in proper condition.

3. If something goes wrong

Contact the seller: Your first step should always be to contact the seller – maybe it was a legitimate mistake. If possible, contact them by telephone and ask what steps to take to rectify the problem.
Contact your credit card company: If the seller does not respond well to your inquiry, contact your credit card company and file a dispute. Although laws vary by province, in most cases you will not be required to pay for an item you did not receive. Make sure you understand your credit card’s policy on filing disputes – a dispute often has to be filed within 30 days of the purchase.
If the purchase was through an auction site, contact the site: Most reputable auction sites have a dispute resolution process and can advise you on how to proceed. It’s also important that you inform them of the situation so they can prevent the seller from taking advantage of future buyers.

Reporting Online Fraud and Scams

Above all, trust your instincts when you are online! For more information, or to report any scams or fraud you come across, visit: RECOL (Reporting Economic Crime Online) at www.recol.ca or the Canadian Anti-Fraud Call Center at www.phonebusters.com.

Links

Scam Protection: A Student Practical Guide
YouTube Video: Phishing Scams in Plain English
YouTube Video: Nigerian Email Scam
SonicWALL Phishing and Spam Online Quiz
RCMP: Scams and Fraud
RCMP: Identity Theft
Department of Justice: Report on Phishing
Better Business Bureau Canada
Statistics Canada: E-commerce
ScamBusters.org: Online Holiday Shopping
ScamBusters.org: 7 New Tips for Safe Online Holiday Shopping
RECOL (Reporting Economic Crime Online)
Phonebusters