What is fraud?
So what do we mean when we say “fraud”? Fraud is any activity that relies on deception to realize a gain. More specifically and what we usually talk about is fraud from a criminal perspective which is when someone knowingly misrepresents or deceives a victim in order to get them to take an action which can result in the victim giving up information, money or property.
What do fraudsters want?
When fraudsters engage a victim they are looking for one of a few things.
Personal information: information that should only be known to the victim. If it falls in to the wrong hands, the fraudster can use it to impersonate the victim. An example of this might be passwords, date of birth, social insurance numbers, etc.
Access to accounts: information such as credit card numbers, bank accounts, balances, passwords, etc. By getting a credit card number and the security code criminals can begin racking up fraudulent charges on your cards.
To pay for something: by applying undue pressure, a criminal may get a victim to pay for something they don’t need or for a product that is not what they expected or ordered.
What are the biggest types of fraud?
Here are some of the most costly frauds reported in Canada in 2021:
Investment fraud – victims are convinced to invest in crypto currencies and deceived into thinking that their investments are growing but when the victim tries to get a return on their investment they are unable to.
Romance fraud – with the growth in the number of online relationships, scammers are building a relationship with the victim, and using that trust to trick the victim into sending money to the fraudster.
Merchandise fraud – online sellers using fake ads and reviews for great deals, then either not delivering or sending counterfeit products
Extortion fraud – using threats or pressure tactics to have victims disclose personal information or pay a sum of money
Phishing or smishing – using deceptive emails or texts with malicious links and attachments to trick victims in to disclosing personal or financial information.
Knowledge is important in combating fraud
Fraudsters are innovative and always getting creative in the ways they try to deceive victims. They can rapidly change their attack and make it specific to each person they engage with. They can also be quite convincing and in some cases very scary by making threats of drastic consequences if you do not comply.
For all of us to be better at recognizing and dealing with fraud we need to know more about it. There is a great need for education and awareness about the risk of an online world and how to be more cautious when navigating it. We also need to learn how to become more cautious and questioning of activity that seems suspicious.
To learn more about fraud and how you can prevent it we encourage you to read our other articles for more in depth information.
- What does fraud look like?
- Do you suspect fraud? What to do next.
- How to identify phishing or smishing
- Cell phone service provider scam
