Protecting yourself from financial scams: What you need to know

Scammers are getting more sophisticated every day, finding new ways to trick people into handing over their money and personal information. Whether it’s a fake email from your bank, a call pretending to be the Canada Revenue Agency (CRA), or a too-good-to-be-true investment opportunity, fraudsters know how to make their schemes look legitimate. 

People don't fall for scams due to gullibility — rather, it's because fraudsters are adept at exploiting timing, tactics, and trust to deceive their victims. Scammers prey on emotions, urgency, and confusion, making it easy to get caught off guard. But the good news is, you can protect yourself. By learning the warning signs of financial scams and knowing how to respond, you can avoid becoming a target. 

Here’s what you need to know to stay safe. 

Common financial scams and how to spot them

Financial fraud comes in many forms, but most scams share one thing in common — they try to make you act before you have time to think. Here are some of the most common scams you might encounter.

Impersonation scams: Fake calls from authorities

Scammers often pretend to be from the CRA, police, banks, or even tech support. They’ll claim you owe money, your account is at risk, or there’s a legal issue that needs urgent action. These calls are designed to make you panic and comply without questioning.

Red flags:

• Demands for immediate payment, often through gift cards, cryptocurrency, or wire transfers.
• Threats of arrest, deportation, or financial penalties
• Caller ID that appears legitimate but is spoofed

What to do and know to protect yourself:

• The CRA never demands instant payment or accepts gift cards as payment
• If you receive a suspicious call, hang up and contact the organization directly using a trusted number from their official website

Phishing emails and texts: Fake links to steal information

Phishing scams trick you into clicking links or downloading attachments that steal your personal or financial information. These messages often look like they’re from legitimate companies — banks, delivery services, or even the government.

Red flags:

• Urgent requests to verify or update account details
• Spelling mistakes, odd phrasing, or generic greetings like, Dear customer
• Email addresses that look close to the real thing but have small differences

What to do and know to protect yourself:

• Never click on links in unsolicited emails or texts. Instead, log in directly through the company’s official website.
• If you receive an unexpected message, contact the company to verify before responding.

Get rich quick and investment scams

Scammers know that people want financial security, and they use that desire to lure victims into fraudulent investments. These scams often promise huge returns with little risk — something no legitimate investment can truly guarantee.

Red flags:

• High-pressure sales tactics, pushing you to act now
• Promises of guaranteed returns — real investments always carry some level of risk
• Request to send money upfront before seeing any returns.

What to do and know to protect yourself:  

• Research before investing — check if the company is registered with the Canadian Securities Administrators (CSA)
• Be skeptical of unsolicited investment offers, especially those that require upfront payments

Romance scams: When love becomes a lie

Online dating scams are among the most heartbreaking forms of fraud, taking an emotional toll on the victim. Scammers create fake profiles on dating sites or social media, building emotional connections before asking for money.

Red flags:

• They claim to be overseas for work or military service
• They avoid video calls or in-person meetings
• They ask for money for emergencies, medical bills, or travel

What to do and know to protect yourself:

• Never send money to someone you haven’t met in person
• Be cautious if a new online friend becomes overly affectionate too quickly

Job and loan scams: Too good to be true offers

Job scams prey on people looking for work by advertising fake job postings that require personal information or upfront fees. Loan scams promise guaranteed approval, even if you have bad credit, but require you to pay fees before receiving funds.

Red flags:

• Job postings that require an upfront fee for training or equipment
• Loan offers with no credit check and guaranteed approval
• Request for personal details like your Social Insurance Number or banking information before an interview or loan approval

What to do and know to protect yourself:

• Legitimate employers don’t ask for money. If a job offer requires a fee, it’s likely a scam
• Research lenders before applying. In Canada, lenders must be registered with provincial or federal financial authorities

What to do if you’ve been targeted

If you suspect a scam, acting quickly is key to minimizing damage. Here’s what to do to reduce the harm:   

1. Stop contacting the scammer: The moment you suspect fraud, cut off communication. If you were speaking to them over email, phone, or social media, block them.
2. Report the scam: Reporting scams helps authorities track fraudsters and warn others. You can report financial scams to:

• The Canadian Anti-Fraud Centre
• Your bank or credit card provider if you shared financial details
• Local police if you lost money

3. Protect your accounts: If you provided sensitive information, take immediate steps to secure your finances by:

• Changing your passwords for online banking and email accounts.
• Monitor your credit report for suspicious activity
• Notify your bank if you suspect fraud so they can take preventative action

How to stay one step ahead of scammers

While recognizing scams is important, staying ahead of them requires more than just awareness — it takes proactive habits and the right tools. Here are a few ways you can protect yourself before a scammer ever has the chance to target you.

First, use multi-factor authentication (MFA) on all financial accounts. This extra layer of security makes it much harder for scammers to access your accounts, even if they manage to steal your password. Many banks and online services now offer MFA, which typically requires a second verification step — such as a code sent to your phone or email — before allowing access. Enabling this simple feature can prevent fraudsters from hijacking your accounts.

Second, monitor your credit report and banking activity regularly. Many people only check their financial statements when they suspect something is wrong, but by then, a scammer may have already made unauthorized transactions. Instead, get into the habit of reviewing your statements monthly and check your credit report at least once a year. In Canada, you can request a free credit report from Equifax or TransUnion to look for any suspicious activity, such as accounts you didn’t open.

Another key step is limiting the amount of personal information you share online. Scammers often gather details from social media such as your birthday, workplace, or travel plans — to craft convincing scams. Adjust your privacy settings to restrict who can see your information and be cautious about sharing personal updates publicly. A harmless post about an upcoming vacation could tip off fraudsters that you’ll be away, making you a potential target for financial fraud or identity theft.

It’s also a good idea to use call-blocking and email filtering tools to reduce exposure to scam attempts. Many Canadian telecom providers offer scam call detection services that can flag or block suspicious numbers. Likewise, email services like Gmail and Outlook have phishing detection filters that can help catch fraudulent messages before they reach your inbox. Taking advantage of these built-in protections can significantly lower the risk of accidentally engaging with a scam.

Finally, educate yourself and those around you. Scammers often target seniors, newcomers to Canada, and people experiencing financial hardship. If you have older relatives or friends who may not be as familiar with digital fraud tactics, take the time to share what you know. Likewise, if you have children or teens using the internet, teach them about online scams and how to spot suspicious requests. Fraud prevention isn’t just an individual effort — it’s something that benefits from community awareness and support.

By taking these steps, you can create strong defences against scams, making it harder for fraudsters to succeed. Awareness is important, but actively protecting your financial security is what will truly keep you safe.