Fraud Prevention: Impersonation Scams
Why Canada’s top fraud schemes are so effective
Scammers have thousands of tricks up their sleeves, but there are a few that tend to top the list year after year. Experts say that’s because they prey on universal human emotions such as love, insecurity and fear.
The public are more aware of fraudulent scams today than ever before as a result of awareness campaigns, education efforts and popular culture (think Netflix’s “The Tinder Swindler” which topped the charts in early 2022). However, as awareness increases, so does the sophistication of scams, meaning more people are being targeted.
Based on reports to the Canadian Anti-Fraud Centre (CAFC), $530 million was lost to fraud in 2022 — an increase of 40% from 2021.
Impersonation scamming, where fraudsters pretend to be a loved one or authority figure, is a tactic used in several different scams and is becoming easier to do with the increased use of the internet.
“Impersonation scams have become increasingly more sophisticated. Fraudsters have taken advantage of consumers as we've grown more reliant on the Internet to shop, socialize and for entertainment,” says Matthew Boswell, Commissioner of Competition at Competition Bureau Canada.
Most common types of impersonation scams
Investment Fraud
Reported losses from investment fraud in Canada in 2022: $308.6 million
According to CAFC, investment scams were the largest in 2022 based on dollars lost. There’s also been a noticeable increase in cryptocurrency scams as digital currency becomes more widely used.
Fraudsters attempting investment fraud are often impersonating a trusted source online, like a friend or family member, to steal money or personal information.
“These scammers play on people’s desire to make it big and they promise huge returns for investments,” says Carolin Robinson, Manager of Risk at Vision Credit Union. “They make it so tempting, but as soon as you give them the investment money, it’s probably gone.”
How to protect yourself from investment fraud and cryptocurrency scams:
- Always be suspicious of unsolicited investment opportunities, high pressure tactics or promises of higher than normal returns.
- If you receive a message from a friend about a new investment opportunity, contact them through another channel to confirm their identity.
- Ask for information on the investment. Research the team behind the offering and analyze the feasibility of the project. Check the registration and enforcement history.
- The Canadian Securities Administrators (CSA) encourages all investors to visit their National Registration Search Tool (www.aretheyregistered.ca).
Psychological Manipulation Scams
Most people don’t want to believe they could be duped by fraud, which is probably why CAFC estimates that 90-95% of cases go unreported. This is particularly true of psychological manipulation fraud such as romance scams, extortion and emergency scams.
Unfortunately, no one is safe from being targeted. Age, education, income or any other aspect of personal background doesn’t matter. Fraudsters are very good at manipulating people to get what they want by taking advantage of normal human tendencies and feelings.
“The people who do this are professional con artists, and they’re very good at what they do. They prey on our vulnerabilities, our hopes and the fact that we're often too busy to monitor these things,” says Robinson. “It’s very effective.”
Romance Scams
Romance fraudsters use dating or social networking sites to contact their victims. They research their targets and create fake profiles designed to appeal to their victim. They quickly profess their love to gain their victims’ trust, affection and money. This type of fraud plays on emotions and may last for months, years or until the victim has nothing left to give.
“These romance scams are the least reported because by the time the victim figures out that it’s a scam, they're too embarrassed to admit they fell for it,” says Robinson. If you’ve fallen prey to a romance scammer, you’re definitely not alone. Robinson says this type of fraud has impacted many people in Vision’s communities and it affects thousands of people across the country every year.
Extortion
Extortion fraudsters often claim to be a government agent, bank employee or in another position of authority to unlawfully obtain money, property or services through coercion.
Fraudsters may threaten that if the victim doesn’t speak to them immediately, they’ll be arrested, fined or deported. They may say that the victim’s personal information has been compromised or linked to criminal activity, and request further information like their social insurance number or bank account balance to help rectify the issue.
Emergency scams
In emergency scams, fraudsters will contact victims claiming that a family member was in an accident, in legal trouble or ill with COVID-19. The fraudster will impersonate the police, a lawyer, or even the family member themselves. They’ll then claim that funds are required immediately to solve the problem, like paying a fine or bail.
How to protect yourself from psychological manipulation scams:
- If you receive a suspicious phone call from someone claiming to be or represent a family member, hang up and contact them directly.
- If the caller claims to be law enforcement or the government, hang up and call them directly.
- Always listen to your inner voice that’s saying, “This doesn’t feel right.”
- Be suspicious of any phone calls or emails that require you to take immediate action.
- Never provide personal information to an unknown caller, including date of birth, social insurance number or banking information.
Other scam trends:
- Email phishing and spear phishing
- Service scams
- Merchandise scams
If you’re the victim of a scam, fraud or cybercrime, please contact your local police. It’s also essential that you report an incident, whether you’re a victim or not, to the CAFC via their Online Reporting System or by phone at
1-888-495-8501.
