Savvy on Financial Scams
By Sylvia Lim, CGA, CFP

Being financially savvy not only means buying smart and saving money, but it means to also be aware of thieves who want to scam you from your hard earned dollars and savings. There have been many financial scams uncovered over the past few years. I feel compelled to remind my reader of these frauds and use common sense to prevent these scams from happening to them.

It doesn’t take much for thieves today to pick our electronic pockets and bank accounts if we’re not careful. Some have done it without the victim even realizing the shortfall until years later, making it almost impossible to catch the culprits. To make sure it doesn’t happen to you, arm yourself with knowledge and chances are you will avoid becoming a victim of financial scams, saving you money, time and headaches.

Here are some tips –

1) Do not donate to a charity who solicits you by telephone.
Unless you are able to call their number back and can verify with the phone company that this is a legitimate charity and their phone number, do not give. This includes any personal information.

2) Beware of tax shelter promoters.
The promise of big tax refunds can be really tempting. Many of these companies appear legitimate with proper tax identification numbers issued by Canada Revenue. But don’t be fooled. They may not be around for long. Canada Revenue has been busy rejecting and auditing tax credits claimed by thousands of unsuspecting taxpayers in the past few years. Do not fall for the trap. When a tax scheme sounds too good to be true, it usually is.

3) Guard your credit card information when shopping on the internet.
Do not give out any credit card information unless you’re certain you’re dealing with a legitimate merchant. When shopping on the internet, make sure the webpage you’re sending your personal information from has https:// before its site address. It means the information to be transmitted from this webpage is encrypted to protect privacy and ensure security during transmission.

Also look for security lock icons like the one issued by VeriSign for added legitimacy to a website. If you’re unfamiliar with the merchant website, this adds an extra layer of assurance that a 3^rd party certificate has been issued, legitimizing the internet merchant’s existence. Most serious and large online merchants will have this feature adding to customers’ peace of mind when they shop online at their site.

4) Cover up your PIN entry with your hand when using the ATM or debit card transactions.
It’s also a good idea to do a cursory visual check of your surroundings to make sure it’s safe, before commencing a banking transaction at an ATM.

5) Use an escrow service like PayPal when buying or selling on eBay.
Do not transact on eBay using your credit card. You have no idea who the other party is and where s/he is located. Try to collect a bad debt from the Ukraine would be very challenging if not impossible.

6) Protect your privacy and ask to be taken off mail/call lists.
Charities often swap donor contacts with each other. For profit entities also share customers’ information with their affiliates and associates for marketing and other purposes. Don’t let them. Ask to be removed from their lists when you find you’re on one. Do not enter contests. Your name often ends up on a call/mail list as soon as you’re in a draw or contest. There are no free lunches!

7) Check your bank account and credit card statements regularly, at least once a month.
Report any irregular transactions immediately. Have your account frozen immediately to avoid further financial damage if you suspect illegal use is happening on your account. Most financial institutions make it your responsibility to report any suspicious activities within 30 days of receiving your statements. Otherwise, you may be liable for any illegal charges on your accounts.

8) Check your credit report at least once a year to make sure your solid credit record is still solid.
You are responsible for reporting any credit errors or omissions back to the credit reporting companies. Two major firms to check with are
Equifax (www.equifax.ca or www.equifax.com) and
Transunion (www.transunion.ca or www.transunion.com).

9) Think twice before giving out any personal information.
Do your homework to make sure the companies and entities are legitimate. If in doubt, check them out.

10) Remind your children to guard their personal information and identity on line.

11) Keep an eye on your aging parents to make sure their personal information is safe.

12) Update your anti-virus program regularly to maintain computer security.
It’s a given that an anti-virus program is a necessity for PCs.

Generally, the world can be a safe place for doing business and other activities, whether on the internet or in person. However, being aware and financially savvy using common sense approaches will help you and your family stay safe and sleep well at night.

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