Do Canadians have a false sense of security when it comes to financial fraud?

Are we more susceptible to financial fraud when we're lonely?

Are we more at risk to fraudsters when we're undergoing a big life change?

Are we more at risk to fraud than we think?

According to the results of a new poll conducted by TD to mark Fraud Prevention Month, the answer to all three questions might be: yes. 

It seems that fraud is everywhere these days. You read about it in the headlines from coast to coast – financial fraudsters continue to target Canadians in large numbers.   

Fraud is an omnipresent and growing problem. In fact, the Canadian Anti-Fraud Centre recently announced that in the first 31 days of 2020, Canadians had already reported losing $4.2 million to fraudsters – not including unreported fraud losses, which means the real number could be much higher.  

Fraud attacks continue to come at Canadians from all directions, through phone calls, email, texts and even by mail. And yet, in a recent poll conducted by TD for Fraud Prevention Month, only 13% of respondents reported personally feeling vulnerable to fraud. 

All of which begs the question, do Canadians suffer from a false sense of security when it comes to financial fraud? 

"The truth is, there is no one group that is most likely to be defrauded – a fraudster will target anyone, at any age or stage of life," said Tammy McKinnon, Head of Financial Crimes and Fraud Management Group, TD Bank Group.  "That's why it's so important to shine a light on common scams and tactics fraudsters use to exploit people's vulnerabilities."

Social isolation could be a key factor

The TD survey revealed that a majority (61%) of Canadian respondents draw a strong link between social isolation and vulnerability to fraud – a connection that makes sense, as someone who is socially isolated may not have anyone to act as a 'sounding board' if they encounter a fraud attack.  

In 2019, the Angus Reid Institute released a study of social isolation in Canada, which stated that about 15% of Canadian respondents reported feeling isolated. While this issue is still in the early stages of discussion and debate in Canada, in other countries, governments have begun to tackle social isolation through government policy. For example, in late 2018, the British government launched a strategy for combatting loneliness in Britain, even appointing a Minister for Loneliness. 

"Fraudsters are skilled at finding a vulnerability and exploiting it," said McKinnon. "It's possible that socially isolated people are a more vulnerable target, because they may be less likely to voice any suspicions about a potential fraud encounter with anyone else."

Ages and stages

The results of TD's poll also indicated that Canadians believe life changes – whether that's a divorce, the loss of a loved one, or simply moving away from home for the first time – can lead to an increased vulnerability to scams. 

For example, someone who has been through a divorce and may be starting to date again might be more susceptible to a romance scam. Someone searching for a job for the first time might not notice the red flags of an employment scam, and fall prey to it. 

"Fraud Prevention Month is a great chance to raise the conversation and help increase awareness and education around ways Canadians can protect themselves and their finances from financial fraudsters," added McKinnon.

While Canadians are their own first line of defense against fraud, organizations like banks also have a role to play, whether that's developing tools for consumers to use like Fraud Alerts and Card Controls, or instituting fraud detection systems in place behind the scenes, or driving public awareness about how customers can help protect themselves.

Generational divides

Results from the TD survey also found a strong disconnect between how generational groups are perceived by others, compared to how they feel about themselves. 'For example, Gen Z or students (29%) and Millennials (16%) were the most likely age groups to report feeling vulnerable to fraud, while other generations perceived those groups to be more likely to engage in risky behavior, such as oversharing personal information on social media, (44% and 52% respectively), which could make them a more likely target for fraudsters.

When it comes to Baby Boomers, the survey showed that 92% of respondents report they do not personally feel vulnerable to fraud. This contradicts widely held perceptions held by other generations about Boomers' vulnerability to fraud. Boomers are seen by other generations to be less technologically savvy (72%), with more assets to target (51%), and to be generally trusting (48%).

Fraudsters continue to target Canadians of all ages and stages of life, which is why it's so important for everyone needs to watch for red flags, and exercise caution. Being tech-savvy, limiting how much information you share on social media and remaining alert are all ways to potentially help avoid common fraud tactics. 

What you can do to protect yourself

There are many steps Canadians can take to help recognize and reject fraud:

  • Think twice before sending money - It's always important to know who you're doing business with, whether you are sending or receiving money. Be cautious before sending money to someone, particularly if it's someone you have only met online.
  • Check your statements, online accounts or banking apps regularly – Stay on top of your accounts and flag any transactions you don't recognize.
  • Use the tools – ask your bank about tools they offer to help you stay alert – these might include text message fraud alerts, spend tracking tools, the ability to block or limit transactions on credit and debit cards, etc.
  • Practice safe passwords – passwords, PINS and other banking credentials should be kept secret.  Always choose a password that is unrelated to easily found information (like birthdays and phone numbers).
  • If you fall victim to fraud, REPORT IT - It's imperative for those who have lost money to fraudsters to report it to the police, and the Canadian Anti-Fraud Centre.  And share your story – your experience may help someone else avoid the same trap.