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Banking Online? Safeguard Your Accounts Against These 4 Scams

January 12, 2024

With financial scams becoming more cunning and sophisticated, learn what red flags to look out for and how to protect yourself.

Online banking scams and financial schemes are hard to spot, and the financial losses they create are even more challenging to recover from.

As more Canadians shop, do business and communicate online, cybercriminals are seizing the opportunity to do harm. Experts say that armed with artificial intelligence (AI) tools, scammers are getting more sophisticated, faster and more challenging to trace.

Here's a closer look at some common financial scams and risky behaviours and how to avoid becoming a victim.

1. Phishing

Phishing scams use emails or fake websites pretending to be from a reputable institution. A phishing scam aims to get you to click on a link or attachment and enter personal and/or financial information so the scammer can access your accounts and steal your money.

Phishing messages used to be rife with grammatical and spelling errors, but AI has changed the game.

Various AI tools like ChatGPT can easily help criminals produce formal, grammatically sounding content in seconds, making it harder to detect scams.

How to protect yourself: Avoid clicking on any links or attachments received via email or text, especially in messages demanding urgent action. Call your financial institution using the number on the back of your card or from a recent bank statement and ask if the communication is legitimate.

2. Spoofing

Spoofing is when a scammer contacts you via a fake email address, phone number, text message, or website that looks legitimate at first glance.

By changing a single letter, number or symbol within the communication, criminals masquerade as legitimate financial institutions in a way that's easy to miss. The spoofed communication is usually used for phishing for your personal or financial account information and/or to steal your identity.

How to protect yourself: Look closely at email addresses and link URLs to ensure no misspellings or typos in the domain names. Double-check phone numbers against those listed publicly on a bank or card issuer's website before calling. Know that most institutions won't email, call or text you asking for personal information or account details out of the blue.

3. Password cracking/hacking

With generative AI tools, cybercriminals can quickly test hundreds or even thousands of passwords on financial websites and social media networks to hack into your accounts. If your password is easy to guess or you don't have two-step verification enabled, it's only a matter of time before a hacker breaks into your account.

How to protect yourself: Create a hard-to-guess password, ideally 16 to 20 characters long at mimimum, with a combination of upper and lowercase letters, numbers and symbols. Longer and more complex passwords take longer for hackers to crack. Try to avoid using the same password across multiple accounts. Using an online password manager is also a great idea.

The Canadian Anti-Fraud Centre also recommends choosing strong and unique passwords for all online accounts, including social media networks, email accounts, financial websites and other online accounts. Additionally, the Centre advises consumers to set up multi-factor authentication on all accounts where possible.

4. Unsecured Wi-Fi

Accessing your bank account or paying a credit card bill while connected to a public Wi-Fi network may be convenient but extremely risky. Public Wi-Fi is often less secure, making it easier for criminals to spy on your activity and copy account information, such as bank account and routing numbers, security PINs, and passwords.

Your home internet connection can also be vulnerable if not adequately password-protected. Scammers can connect to the devices on your home network to access sensitive data, such as passports, tax returns, photos and financial documents, and then lock you out of the devices.

How to protect yourself: Don't use a public Wi-Fi network to log into any financial institution, and regularly update all of your devices' operating systems and third-party apps regularly.

When accessing sensitive accounts or work systems, use a Virtual Private Network (VPN). A VPN is a program or app that funnels your internet activity through a secure, third-party service provider that's not part of the public Wi-Fi connection. This encrypts your web browsing and email communications, keeping them private and away from the potential prying eyes of a criminal.

Additionally, ensure your home wireless network is protected by a strong password and inaccessible to neighbours or the public. Back up your essential information to an external hard drive and store it in a safe place (but don't keep it connected to your on-network devices).

What to do if you've been scammed

Cybercriminals are honing their craft, using more sophisticated tools and finding sneakier ways to exploit consumers for financial gain.

If you suspect you've fallen victim to an online banking scam or other financial fraud, here are a few steps to follow...

Change all account passwords immediately to a hard-to-guess password. Contact your financial institution immediately to report the fraud or scam. Depending on your user agreement, you may need to report the incident within a specific time frame. Otherwise, you may be held responsible for the transaction and won't be able to get a full refund of stolen funds.

Check your financial accounts for suspicious or unauthorized transactions, and report those to your bank or creditor.

Request a copy of your credit report to check for unfamiliar accounts or credit inquiries. If so, immediately notify the creditor/company and the credit reporting agency of the fraud.

Report the fraud or scam through the Canadian Anti-Fraud Centre's Online Reporting System tool or call 888-495-8501 to file a complaint by phone.