5 min read

5 tips to avoid finance and credit scams

Rounding it up

  • There are lots of scams out there that take advantage of consumers, from phishing emails to full on identity theft.

  • Thieves are after your identity as well, but your identity is also key to solving this problem via biometrics.

  • Use your head and protect your personal information.

Finance and credit scams have been around as long as there’s been financing and credit. The hard truth is that wherever money exists, there will always be people trying to steal it. It's an unfortunate reality of the world we live in. Whether it’s targeting the elderly or plain working folks, criminals target Canadians and try to swindle hundreds of millions of dollars every year.

Hope is not entirely lost, however. There are some simple ways you can spot and avoid scams, keeping your money and identity safe and secure. Protecting your financial information as well as your personally identifiable information (PII)  is key to keeping you safe as you make purchases at brick-and-mortar shops and across the internet. Read on to learn about some tips to avoid finance and credit scams and one of the keys that criminals really want.

Common scams

There are tons of common credit and finance scams that an unsuspecting consumer can fall victim to. It’s important to realize that this can happen to anyone. Everyone from the wealthy to ministers of state have been the target of scams; thieves are equal opportunity operators in this way.

There are a few common scams that seem to appear over and over again that you should look out for:

  • Phishing email: Any email that asks you to click on a link to start a transaction or alert you to a prize you’ve won is almost always a scam. Sure, there could be the odd email here and there that’s legit, but more often than not, they’re fake

  • False deposits: Lots of people sell things online. A common scam involves the buyer of your item sending extra money and asking for a refund of the portion that exceeds the cost of your item. In reality, they’re using a stolen credit card and when the transaction is reversed by the victim’s credit card company, the thief will end up with the item and the cash you sent them.

  • Debt collection: If you receive a phone call or email telling you that you owe a company money, you should treat it as fake until proven otherwise. Find the company’s legitimate website and call the number to speak to a representative or someone who can confirm or deny what you’ve been told.

  • Grandparent scam: Here, a fraudster will pose as a family member or friend and tell you that they need your help. It can be very tempting to send money, but refrain. Check with other family members to see if that family member really needs help.

  • Charity scam: Unfortunately, there are people that pose as a charity to scam people out of money. Be sure to research the charity carefully and avoid giving money over the phone or via email. Instead, visit the charity’s website directly. The Canadian Revenue Agency has an entire website dedicated to charities.

The key: you

Believe it or not, you are both the goal of criminals and the key to stopping them from stealing your information and money. Stealing cash or weaseling gift cards out of an unsuspecting victim translates to a great payday for criminals. But the real money is in your identity. With your identity, criminals can open lines of credit, make large purchases, and apply for government benefits on your behalf.

Identity theft is something we hear a lot about; so much, in fact, that it may have lost meaning for many. When a criminal steals your identity, they’re taking the information they need to make financial decisions on your behalf. This can take the form of your name and address, your identification number for your driver’s license, and/or your social insurance number. They may also have access to passwords that you use, phone numbers, and the answers to security questions. Once they have enough information, they can use it to reset passwords to important websites that you use, including social media. Doing this also puts them in a prime position to attract other targets.

The Bank of Canada estimates that 1 in 5 Canadians has been a victim of identity theft, and that number is only increasing. So, what does an identity thief actually do with your data? More often than not, your PII ends up on the dark web for sale as part of a larger security breach. These breaches will often be grouped based on the types of information in them. For example, a large group of credit card numbers and accompanying PIIs from creditworthy individuals would fetch a higher price than ones from people with lower scores.

Whether thieves sell your info first or not, they’ll use it to make purchases, open accounts in your name, and attract other targets to their scheme.

The answer

You’re also the answer to this problem. Biometrics have begun to roll out across all sorts of devices, from the very expensive to the very cheap. Popular mobile phones now use your fingerprint, your eyes, or your voice to unlock. Computers also use similar features. Technology companies are working together to promote security standards that could completely do away with the passwords, making your information more secure than ever before.

The tips

So, what are some key things you can do to avoid becoming a victim of finance and credit scams?

  • Use your noggin

If you take nothing else from this article, take this: be skeptical of everything. If it’s too good to be true, it probably is. There are very few instances where the normal Canadian is going to suddenly win a lottery they never entered. Whenever you’re dealing with personally identifiable or financial information, second guess everything even when it seems relatively normal. Paying for something through a reputable website? Take a look at the web address and ensure that it's pointing to where you expect. Ensure there is an ‘https://’ and a lock symbol in the address bar.

  • Links

Links can make our lives more convenient, and thieves know that. Be extremely careful when clicking on links that you receive via email or text message. Instead of clicking a link in a message, visit the website directly and login through it. If the message is legitimate, it will still appear appropriately.

  • Care

Take care with your personal documents. Carry only what you need to carry out the activity or business you’re handling. Leave your important documents and extra cards at home. There’s no need to carry your passport to and from work every day. Lock it up in a secure location at home.

  • Review

Carefully review any documents you receive in the mail. If you don’t receive statements, make a list of websites you should check regularly to ensure there are no errors or irregularities. You should also review your credit report frequently. Many credit card and bank websites now offer your updated credit report and credit score each month. You can also request a free credit report from Equifax and Transunion via the government.

  • Passwords

Protect your passwords with everything you’ve got. While government resources suggest not to use the autofill feature offered on popular web browsers, we’ve found that a robust password management tool can make it easier to fill in passwords while allowing them to be extremely long and complicated. Never use a password that includes any PII like your name, your children’s names, your address, or your birthday. Most importantly, don’t share your passwords across different websites; otherwise, a scammer could get a hold of all of your information all at once.

What should I do if I get scammed?

If you do get scammed, there are few things you need to do to start the recovery process. If you’ve found some odd charges on your credit card, you may only need to report these to your financial institution and request a new card. It’s a good idea to change the login details for that particular card’s website as well.

If you’re the victim of a more elaborate scam, like the ones mentioned above, quickly contact your financial institution to see if you can get the charges reversed. It’s also a good idea to report the scam to the police; while they may not be able to help you specifically, the authorities may collate your report with others in order to form a picture of the kind of scammers they’re dealing with.

If you find some odd-looking items on your credit report or even identify a fake credit report, you may have had your identity compromised. According to the Canadian Government, you should immediately:

  • notify your financial institution and the local police;

  • contact the Canadian Revenue Agency at 1-800-959-8281;

  • report the theft to a credit reporting agency such as Equifax or TransUnion;

  • keep records of recent purchases, payments, and financial transactions; and

  • call 1-800-O-Canada (1-800-622-6232) for information on where and how to replace identity cards such as your health card, driver’s licence, or SIN if necessary.


One of the most important things you can do to protect yourself from finance and credit scams is to use common sense. If something seems too good to be true, it almost certainly is. Ensure you’re constantly protecting your private information, and keep your passwords difficult to guess. Most importantly, make sure you check in with your credit card statements and credit reports frequently. Vigilance will help keep your financial life secure.

Note: KOHO product information and/or features may have been updated since this blog post was published. Please refer to our KOHO Plans page for our most up to date account information!

Dan Bucherer

Dan is a runner and writer living in the Washington, D.C. area, where he currently works for a financial services trade association as the Communications Director.