November is Financial Literacy Month, a time to encourage and assist people as they build the knowledge and skills that lead to better financial resilience.
Beyond helping people save smarter or get out of debt sooner, an important but often overlooked aspect of strong financial literacy is learning to reduce the risk of financial scams and fraud.
Needless to say, the cost of getting caught up in a financial scam can be crippling, potentially wiping out years of hard-earned savings. Victims don’t need to be exceptionally wealthy to be targeted, they just need some level of vulnerability.
Here’s a look at a few things individuals should do to diminish the risk of falling victim to a financial scam.
Safeguard your personal information
Always be extremely cautious when sharing sensitive information, whether it’s a social insurance number, credit card number, bank account number, or your date of birth. Reputable businesses and organizations will almost never ask for such information online, in an email, or over the phone, so be wary of anyone who asks for personal details without an obviously legitimate reason. Be extra cautious when receiving automated phone calls warning of a bank account or credit card issue or claiming to be from a government agency such as Service Canada or the Canadian Revenue Agency.
Likewise, take great care with passwords and login details for cards and accounts. Try to avoid duplicating passwords and change them regularly. Never store passwords on your phone. Set up multi-factor authentication wherever it’s offered to better protect yourself.
Don’t let tempting promises cloud your judgement
As the old saying goes, if something seems too good to be true, it probably is. Still, when someone offers us the prospect of eye-popping returns, it can be easy to get carried away by the idea of hitting it big.
Unfortunately, this is just one of the ways that some financial scammers try to play on our emotions, blinding us to their bad intentions with big talk of lofty outcomes. Keep your wits about you when considering financial opportunities, don’t let sketchy promises push you into making a bad decision, and try to only deal with licensed, legitimate operators.
Be smart and safe online
Make sure you’re using the most recent versions of the operating system and browser software available for your computer, phone, and tablet, and remember to install up-to-date anti-virus and malware protection software. Always take precautions when interacting with suspicious messages and websites. Never enter personal details on a website you’re uncertain about, and don’t click on the links or open downloads in any unsolicited email messages.
Have a trusted team you can turn to
One of the most common shared characteristics among victims of financial fraud is a degree of social isolation and, by extension, a lack of external advice on financial matters. When people don’t discuss their personal finances with others, be their friends, family, or financial professionals, they don’t always get the good advice they need. As people age and lose mental sharpness, the risk of financial scams rises.
As a defence mechanism, experts suggest consulting a trusted financial adviser before major financial decisions. Ideally, they would be a legal or financial professional, but trusted friends and family can also be effective at identifying potential fraud risks.
