40 – Scams: How to Recognize and Avoid Online Fraud

Wayne Kay  0:04  

Well, welcome to the Debt Matters podcast where we help Canadians find solutions to their debt with Licensed Insolvency Trustees from across Canada. I’m Wayne Kay and in today’s show, we’re going to be talking about how to recognize and avoid online fraud, which happens a lot these days. It’s every day I’m hearing more and more about this. 

To help out I’ve got Bonnie Hooley, with LCTaylor Licensed Insolvency Trustee in Winnipeg, Manitoba. They also have an office in Kenora, Ontario. Bonnie, welcome back. 

This is such a big topic. And obviously you probably hear much more about it. I see it in the news and a lot. But we’re going to talk about how to recognize and avoid online fraud. I almost find it shocking how many people fall for it. But on the other hand, I don’t because it is so involved these days.

Bonnie Hooley  0:58  

Yes, it’s interesting because we hear about the scams, and you think, Who would be foolish enough to fall for that? But I meet the people who have been financially devastated by some of the scams. And the reality is, it can affect anybody – it just depends on how complicated the scam is.

Wayne Kay  1:16  

I know people who’ve been scammed out of $10,000. But the numbers can be way higher than that.

Bonnie Hooley  1:23  

Oh, they are. We had an individual – I felt so sorry for her. She cashed out her entire retirement savings plan over $100,000. She remortgaged the house. She was left, as a senior with basically nothing and should have had a very cushy retirement, but she was just royally scammed. And so unfortunately for her, the devastation to her probably wasn’t even as great as the financial was – that someone could take such an accomplished individual and destroy their trust, so wholly, but these things happen. 

We’re here to help with the financial devastation from it. But there’s two sides to that coin, and people are affected hugely. The scam can be minor, and we often don’t see those ones. But when it’s going to financially devastate somebody, then that’s usually when they’ll come in and talk to us about their options.

Wayne Kay  2:20  

Do we have research on who’s most likely to be scammed?

Bonnie Hooley  2:24  

You know, it’s interesting because we all sort of have a preconception of who is most likely to be scammed. And I think it depends on the type of scam. We sort of assume it’s going to be a senior citizens sort of thing. But the reality is that many of them, although they come from a generation that was a lot more trusting, a lot of them are on the ball and smarter than we think. And so they’re not as necessarily as easily hoodwinked. 

You would think that it would not be professionals, but I find that it does affect professionals. And it affects immigrants, because some of them come from countries where laws and rules are a little bit different. And so they don’t know that something that would be blatantly ridiculous to someone who’s lived here all their life – that it is not necessarily normal in Canada. Sometimes that can affect it. But in my experience, it affects every walk of life. And so I think that you can’t assume that you won’t be scammed. You just have to be on your guard for the type of scam that would hit you.

Wayne Kay  3:29  

That’s good to know, I think because we do start feeling like we’re maybe overconfident. Maybe we think, Well, I’m pretty aware and hopefully I’m not going to fall for any of these scams. For the most part, what I love about cell phone technology is if I don’t know a number, I can pretty much block it.

Bonnie Hooley  3:49  

Yes. And a lot of people don’t. They go, Oh, maybe that person needs to get a hold of me. I’m also one of the people that blocked numbers. You know, they’re not always necessarily phone call type scams. 

We had an individual who applied for a job and thought he was working for a viable company, and was scammed – working from home and setting up his business with this company. So it’s not just an online scammer who tricks you with a phone call. It can be any kind of a scam.

Wayne Kay  4:21  

Oh my gosh. Okay. So, there’s really a lot for us to be aware of.

Bonnie Hooley  4:26  

Yes, with this individual in this particular scam – they were an international firm and they wanted a Manitoba base for their companies to put payments through, that sort of thing. So this guy was very smart and ensured that he set up a separate account for this because it’s a business. When the customer made the payment – it went into the account. He ensured it cleared the bank before he forwarded the funds on. But apparently that wasn’t enough protection for him. Although he could deposit it before he forwarded the funds on and retained his portion –  then the funds were withdrawn and he was left holding the bag. So you think you’re being super cautious, but it can happen to anybody.

Wayne Kay  5:14  

Yes. When we talk about these debts that happened because of being scammed, let’s say you’re putting it on your credit card. Do you actually have to pay those debts off, if it’s something like a credit card?

Bonnie Hooley  5:27  

You know, it depends on the type of scam. If it’s a credit card debt, that someone has stolen your credit card or stolen your credit card number, some of the credit card companies will catch that. They’ll reverse it, they’ll stop it and you won’t be liable for it. Also, some credit cards carry insurance on it for fraud. And so again, you wouldn’t be stuck with it. 

But sometimes, depending on the type of scam, you could be on the hook for it. Because scams can even happen with household members, where they steal your credit card and use your card. And you don’t necessarily want to report them to the police. And so in those cases, you are stuck paying the funds back. So it depends on the nature of the scam, I would guess.

Wayne Kay  6:10  

And what about debts, like the lady you used as an example where she cashed in her savings or retirement savings? When that’s gone, that’s gone. There’s no way to get it back for the most part.

Bonnie Hooley  6:24  

Yes, so then she had to rely on credit to survive. And the scam couldn’t be recovered, because they couldn’t find the scammer. And so she was left holding the bag with the debt that she incurred trying to manage for a short term. Well, she was expecting the money to be repaid. So in that case, she was stuck with the debt. 

Now in those situations, that’s what the Bankruptcy and insolvency act is designed for. It’s for people like that honest and unfortunate debtors. If you are scammed in that way, then you can get the debt erased through a Bankruptcy or a proposal under the Bankruptcy Act.

Wayne Kay  7:05  

Okay, so there are some options for people. Yes, but you’ve got such an embarrassment. I mean, you’d be mortified that this happened to you. Your trust would be nothing, you wouldn’t be able to trust people. But really, there would be an embarrassment that I should have known better, I missed the sign and missed a red flag. It would be very difficult.

Bonnie Hooley  7:29  

I think that is key. If people start to recognize that, depending on the scam, it could pretty much happen to anybody. And if we stopped shaming people that have been scammed, then people may be more willing to come forward when they are seeking help. And be willing to say, I was one of those people that was drawn in. And so if we can get rid of the shame around it, then people are more able to seek solutions to what’s happened to them. They’re victims and there’s help for them.

Wayne Kay  8:03  

It’s also important they report this to the police.

Bonnie Hooley  8:05  

Yes, depending on the scam. I almost always encourage that it be reported. Because if they can gather enough information from different sources, and people that report it, then they can narrow in and at least shut down some of the major scams.

Wayne Kay  8:20  

Yes, there was a local story about somebody I actually knew.They fell for the grandparents scam, which is the one where your grandchild was arrested. They were with somebody else who was drinking or what have you. And they are now in prison. And we need to get them bail for $10,000. And they even let this pretend grandchild talk to the grandparent. but how many grandparents sometimes maybe they haven’t connected with a grandchild for quite a while. 

So they ended up $10,000 – they were going to send it by Purolator over to some place. And when my friend found out about her parents falling for this, she instantly called the police. And the police were actually able to get that cheque back before it went. And then they went to the other side and we’re able to, I believe, make an arrest for the person who was supposed to pick up the cheque.

Bonnie Hooley  9:17  

Oh, that’s awesome. Yeah, there’s a girl in our office – her grandma got that call. And her grandma said, Good, let her rot in jail. And then she called my coworker and said, Oh, you’re at work. Good to know, because I just got a call that you’re in jail and you need bail money.

Wayne Kay  9:37  

Well, and that’s a really important thing, too – you hang up and you call them to make sure that you know. You can’t take their word, you have to make the phone call. Oh, that’s brilliant that somebody who already knew about that scam.

Bonnie Hooley  9:52  

Yes. And that’s the key. How can I protect myself from these scams? It is to verify, verify, verify. So even if you think it’s a cousin, even if you think it’s your grandchild, even if you think it’s your bank or Canada Revenue Agency. We’ve all gotten that call, verify, verify, verify before you ever send any money or give out any personal information.

Wayne Kay  10:18  

Are there some red flags or warning signs we should be aware of about being scammed?

Bonnie Hooley  10:23  

Yes, there’s some common ones. Some of the more common ones are – if you’re asked to buy a gift card and send it somewhere, then that’s usually a big red flag that you’re involved in some kind of a scam. And if you’re confronted with an urgent request, like your granddaughter is in jail, and needs your help or Canada Revenue Agency is sending the police. Anytime it’s an urgent request, asking you to deal with it right now, that’s sometimes a red flag that there’s a scam ready to happen. 

Also, you sometimes will get a call that you want a prize for a contest, and they want some information from you. Well, if you didn’t enter that contest, then be super careful, or even if you did enter the contest, don’t give people personal information. Those can sometimes be scammed. 

Anytime you’re asked to give personal information over the phone, you should always verify that before you give the information. And don’t verify it by calling the number they give you. Verify it by getting off the phone, researching your own number that you can call to ensure that you’re talking to the right person. 

Emails are tricky. They really try to make an email look like it’s coming from the source. But sometimes if you hit reply, and you check where it’s coming from, that’s one of the ways you can sort of catch that’s a fake email that’s coming at you. And then I guess the bottom one would be if it seems too good to be true, it probably is. So those are some of the flags that I would say to people that if that’s happening, just give yourself a second check and go let me look a little deeper first.

Wayne Kay  12:07  

There’s a lot of times though, if you’ve watched any of these documentaries recently about the scammers, they’re being swindled by somebody, and it can go on for years. It’s a relationship and they want to believe in the person, but there’s flags coming up, and they don’t know if they should. We just have this human psychology that we want to believe it’s okay.

Bonnie Hooley  12:34  

That’s exactly right. And also, they’re extremely good at drawing you in, like they are practiced, right? So to an outsider who connects the dots, it sometimes looks obvious, but when you’re being drawn in one step at a time, it’s not as easy to notice the flags. Sometimes you do notice the flags, and then they’re really good at dancing around, if you’ve questioned them on it. 

So it’s not fail proof that you won’t get drawn in. But we’re in a world where we can’t trust people the way we did when I was younger anyway. And you have to assume the worst sometimes. And then, do your due diligence. When the hardest ones are people that you know, personally that take you in. If you can’t trust the people that you know, personally, then who can you trust?

Wayne Kay  13:27  

Yea. So as an insolvency Trustee, what are some of the things we can do if we are stuck with this huge debt because of a scam?

Bonnie Hooley  13:38  

The first thing is exactly what you said, report it to the authorities. The authorities often can’t get your money back but don’t think it’s useless. They’re not going to help me anyway. But sometimes they can. The better reason for reporting it to the authorities is so that your creditors will know you’re not the scammer or the criminal. And also, then they can start a trail of people that do this sort of thing. 

Then the second thing is to talk to a professional like a Licensed Insolvency Trustee to see what your options are for dealing with the debt that you’ve been stuck with. We have options under the Bankruptcy and Insolvency act to help you manage the debt load. There’s options sometimes that are even outside of the Bankruptcy and Insolvency Act that we can refer you to. So talk to a professional about what I do with this debt that I’ve been stuck with because of this scam.

Wayne Kay  14:31  

Well, let’s just hope it’s not going to happen to people. But that’s pretty much like hoping it’s not going to snow in Winnipeg in the winter

Bonnie Hooley  14:41  

Yes.

Wayne Kay  14:44  

You’re guaranteed it is going to and it’s just a matter of you being fully aware. Funny you mentioned the emails and different ways that people are reaching out in scams. I even sometimes get emails from myself. They’ll send me an email with my own – it’s me trying to scam myself. And I don’t know what the technical term is – a spoof email or something like that and they can replicate it. 

Bonnie Hooley  15:11  

Luckily, they did it for a while. You were getting calls from yourself, you’d pick up and your like, my phone is calling me. Yes, so the red flags?

Wayne Kay  15:21  

You should know that you’re not doing this to yourself and be aware. And I think the gift cards to that’s a big one. A lot of people fall for that. And I guess I think it’s legit, but I don’t think I’ve ever gone anywhere where they’ve required payments, by gift cards, or Apple cards or anything like that. 

So I talk to people about this as well, I think it’s perfectly fine. For the phone – phone your kids and ask them to phone a friend and say, Have you ever heard of this? Does this sound legit to you? Because I think a lot of people are happy to give advice.

Bonnie Hooley  15:59  

That’s a really good point that I should have thought of. But I’m glad you brought it up. Because actually, that’s what I do when I get an email or a call that doesn’t sound right. I have people that I trust that I contact and say what do you think of this? And you know, they’re usually either able to give me some constructive ways to view it to see if it is a scam, or ways to proceed to check to ensure that it is legit. So yes, friends are very helpful, especially if you have some smart friends. 

Wayne Kay  16:28  

All right, Bonnie, anything else you want to add in this topic for today?

Bonnie Hooley  16:33  

I guess not. The only final thing I want to say is that if you are a victim of a scam, and you are left financially devastated, don’t be embarrassed to call a professional like a Licensed Insolvency Trustee. Because we do deal with people in these situations. And we do understand that it can happen to anybody. We’re here to help you not make the situation worse. And so we’ll do what we can to help you get out from under the load that you’ve been left with.

Wayne Kay  17:00  

And I’ve had so many great guests from LCTaylor. Such a great firm. So I’m going to send people to that website. If it’s all right, Bonnie. Terrific. Well, thank you very much for being on the show today. 

Bonnie Hooley  17:16  

Thank you. Nice talking to you again. 

Wayne Kay  17:18  

That’s Bonnie Hooley with LCTaylor Licensed Insolvency Trustee in Winnipeg, and they’ve got offices in Kenora as well. If you want to schedule a free consultation, you can do that with LCTaylor by heading over to the website LCTaylor.com. 

And that is it for another edition of the Debt Matters podcast. Just make sure you subscribe wherever you get your favorite podcasts from and of course, for more information, you can always check out our website at debtmatters.ca Thanks for listening.