Get smart

March is Fraud Prevention Month – an opportunity to highlight fraud and spread the word:
Recognize it. Reject it. Report it.

When government agencies call, Canadian residents take matters seriously. Unfortunately, the same respect and confidence that allows officials to effectively go about their business can play into the hands of the perpetrators of the extortion scam, who send official-looking Canada Revenue Agency (CRA) emails asking for personal information, or phone with threats of arrest or deportation if payments aren’t made. The scope of this scam, now sweeping the country, has propelled it into first position of the Competition Bureau’s top 10 frauds.

Recognizing the signs of fraud is the first step in prevention. In the case of the extortion scam, it helps to know, for example, that the CRA doesn’t send emails with links asking Canadians to divulge personal information (unless there’s been a specific personal request). And the CRA does not ask for personal information by email or text message, or leave personal information on an answering machine, or request payments by prepaid credit cards.

FACT box.jpg

“Canadians need to take the time to inform themselves about fraud. The more they know about the various types of scams, the less likely they or their loved ones are to become victims,” says John Pecman, Canada’s Commissioner of Competition. “This is why we urge people to learn to recognize fraud and assist law enforcement agencies by reporting it. When you report fraud, you contribute to making sure that others are not victimized and criminals are brought to justice.”

Cairine Wilson, vice-president, corporate citizenship, Chartered Professional Accountants of Canada (CPA Canada), agrees, “People have to realize that alerting the Canadian Anti-Fraud Centre or the police can prevent fraud from happening again, yet a large number of scams are not reported simply because people feel too embarrassed.”

Drawing on the recent findings of CPA Canada’s annual fraud survey, Ms. Wilson explains that 75 per cent of respondents said they are more concerned about fraud than five years ago. “This shows that people have a greater understanding of the dangers,” she says, adding that the aim of the survey is to go beyond anecdotal evidence to look at the big picture.

One-third of respondents indicated they have been a victim of fraud at some point in their lives, says Ms. Wilson, who isn’t surprised by this number. “We’ve been asking several questions over a number of years and it is clear that fraud remains prevalent. While the trends have stayed the same, the numbers are increasing every year,” she adds.

Heightened awareness about identify theft has Canadians worried about others gaining access to their personal information, says Ms. Wilson, who offers two recommendations: “One, keep your personal documents, especially your Social Insurance Number, confidential. And two, monitor your credit report regularly to see if there are signs of identity theft.”

Safeguarding personal information is a key preventative measure suggested by Competition Bureau. Mr. Pecman says employers can also play a larger role by creating awareness among employees about current scams and how to avoid them. “There is a lot we can do by shining a light on fraud,” he explains. “Fraud can occur online, over the phone and in person and can take many different forms, such as internal fraud, identity theft, and business directory and supply scams that use fake invoices.”

With the total sum associated with the Competition Bureau’s 10 most common scams exceeding $50-million, fraud does serious damage. “It’s a big business that targets everyone – individuals of all ages and companies both small and large,” says Mr. Pecman.

And the impact of fraud is felt across many sectors, including Canada’s life and health insurers, which provide supplementary health coverage to 27 million Canadians and pay over $30-billion every year for health-care services delivered to Canadians through their benefit plans. Karen Voin, director, electronic claims and claims fraud issues, Canadian Life and Health Insurance Association (CLHIA), says that health-care fraud and abuse of benefit plans are a concern that insurers take seriously.

“We continue to make significant investments in technology, skilled staff and awareness initiatives with our clients to mitigate health-care fraud,” she says. “The industry also recognizes that reducing health-care fraud and abuse is a team effort. We work closely with health-care professionals, our clients and law enforcement to provide education and other tools to minimize the impact of fraud and abuse on benefit plans.”

The CLHIA advises to protect personal information, including benefits plan access information, to ensure that receipts are correct and reflect the service or treatment that were received, and to check the explanation of benefits provided by insurers to ensure that it includes only the services or products that were obtained.
More information on fraud is available on the Competition Bureau website (including The Little Black Book of Scams), the CLHIA website and the CPA website.

For more related to this story visit