Protect yourself from financial fraud
By Peter Diekmeyer • Bankrate.com

There's an old saying in the news business: "If it bleeds, it leads." Crime and fear sell newspapers and attract TV viewers, but the irony is that the number of highly publicized crimes such as murders, armed robberies and kidnappings committed in North America has been on the decline for years.

But there is one sphere of criminal activity that Canadians almost never hear about: fraud, in particular, investment, credit card and online fraud. Fraud does not photograph well, but it's there. And with the advent of the Internet, the opportunities for criminals are increasing exponentially.

The good news is that by taking a few simple steps, Canadians can go a long way toward protecting themselves from this menace.

Investment fraud
For criminals, fraud is big business. One recent study claims that more than 1 million Canadians have at one time or another been victims of investment fraud. More than 90 percent of Canadians believe investment fraud should be treated as seriously as violent crimes, but most people believe this is not happening.

Investment fraud is a big challenge for the Canadian Securities Administrators, or CSA, the group that sponsored the study. As chairman Jean St-Gelais, stated: "The first casualty of fraud is the victim's trust in other people, investments and the financial markets. As regulators we are concerned when investors lack the trust to invest again. We must continue to educate people on how to recognize, avoid and report investment fraud."

Despite the losses they suffer, few fraud victims actually report the crime. Only 17 percent of those targeted reported their experiences with attempted fraud to the police, consumer advocacy groups or the appropriate regulatory authorities.

Experts say there are several steps people, particularly vulnerable seniors, can take to minimize their chances of being targeted. These include keeping informed about the early warnings of potential fraudulent activity and not letting their emotions guide their investment decisions. Other precautions include being careful when selecting an investment adviser and double checking all signed documentation.

Credit card fraud
Another increasingly lucrative field for criminals is credit card fraud. The use of consumer credit in Canada has grown tremendously in recent decades. According to the Canadian Bankers Association, there were about 56.4 million credit cards in circulation at the end of fiscal 2005, with MasterCard and Visa alone accounting for approximately $190.6 billion in purchases during that year.