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Common Financial Scams and How to Avoid Them

The best way to avoid becoming a victim of a financial scam is to educate yourself. It’s important to understand what kind of scams are out there, know how to recognize them, and learn to protect yourself. We’ve got the basics right here.

Protect your private information from hackers.

  • Never use personal dates or family names as passwords.
  • Choose a long password (10 or more characters) that includes a mix of uppercase and lowercase letters, numbers, and special characters. Even better, use a password generator such as LastPass to generate strong, encrypted passwords.
  • Change your password every three to six months.
  • Never give out passwords, PINs, or login details to someone you’re not totally sure about. Most reputable businesses, banks or agencies will never ask for this information, although you may be asked to enter passwords numerically.

Stay safe when banking online.

  • Set up two-factor authentication on your financial accounts.
  • When possible, avoid using public WiFi networks to access financial sites. Hackers can use ‘man-in-the-middle’ attacks to steal your information.
  • Check web addresses for the lock sign and ‘https’ at the start of the URL instead of just ‘http’ – the “s” indicates a layer of security for payments and other transactions.

Never invest in anything you’re not totally certain about.

  • Investment scams were one of the most common frauds in Canada in 2021, with more than $70 million lost to these types of schemes.
  • Seek input and advice from a reputable financial advisor before deciding to invest in anything you encounter online or are unfamiliar with.
  • Take extra caution with anything, especially a cryptocurrency, that promises ‘guaranteed’ returns or extremely high rates of return. If it sounds too good to be true, dig deeper and find out why.

Don’t get hooked by phishing.

  • ‘Phishing’ is when crooks pretend to be a government agency or reputable business and trick you into giving them money or account information. These scams cost Canadians at least $38 million in 2021.
  • Be wary of phone calls, emails or text messages that make threatening demands about unpaid bills or overdue accounts. Never feel pressured to give out sensitive information.
  • Don’t click on links or download attachments from suspicious texts or emails.
  • If you are being instructed to change a password, go directly to that site to do it instead of clicking on a link from an email.
  • Check email sender information and hover over links in emails to see if the address and URL match those of the businesses or agencies they claim to be representing. For example, if you get an email from Facebook saying your password has been compromised and you must immediately click on a link or else your profile will be removed, check to make sure the email is coming from,, or
  • If you’re ever unsure, don’t click a link and instead contact the business or agency directly.

Thwart identity thieves by staying on top of your information.

  • Shred financial documents and statements before putting them in the garbage or recycling.
  • Set up notifications that alert you of any suspicious activity or spending with your cards and accounts. Log in to your accounts regularly and immediately report any unidentified transactions.
  • Consider pulling your own credit reports to find out whether anyone has tried to open an account in your name without you knowing.
  • Be wary of giving personal information or sending money to people you’ve met on dating apps or social media but have never interacted with in real life. Scammers can take months or even years cultivating fake relationships before hitting you up for cash.

Keep the back door closed – stay up to date with the latest versions of apps and operating systems

  • Updates to apps and computer operating systems often fix potential security flaws and other concerns, so staying up to date with the latest versions can be crucial. Set up “automatic updates” on your phone apps.
  • Hackers will exploit ‘back doors’ in out-of-date software and systems to steal passwords and account information.
  • Consider installing anti-virus software and a virtual private network (VPN) for enhanced browsing security.
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