Protect yourself from financial fraud
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.
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.