Fake CRA audit scam
This involves recorded voicemail messages from someone claiming to be from
the Revenue Canada Agency, saying that I have overdue taxes and that legal
action will be taken unless I pay immediately. There’s a call-back phone
number given with an Ottawa area-code. They’ll typically ask for payment in
some form of untraceable medium, such as crypto-currency or gift cards. If
you receive such a call, simply hang up.
Never give any personal or financial information over the phone to
someone you don’t know
. And never call back on the number given.
Ask yourself why the CRA would be asking for your social insurance number
and other identity information – they already have that. If you still
aren’t sure whether it’s a scam, hang up anyway, and call the Canada
Revenue Agency back through their main toll-free number (1-800-959-8281) or
check the CRA’s
feature online to see whether you owe money or are entitled to a refund.
A number of these CRA tax scam call centres have been broken up in India
recently, but they continue to proliferate because they are so lucrative
for the scammers.
The CRA warns taxpayers to be vigilant when they receive communication that
claims to be from the Canada Revenue Agency, requesting personal
information such as a social insurance number, credit card number, bank
account number, or passport number. The Canada Revenue Agency will not do
any of the following:
Send email with a link and ask you to divulge personal or financial
Ask for personal information of any kind by email or text message.
Request payments by prepaid credit cards.
Give taxpayer information to another person, unless formal authorization is
provided by the taxpayer.
Leave personal information on an answering machine.
Binary option scam
In this scam, usually initiated through an online link or pop-up, often on
an unrelated financial site you might be visiting, you’re offered
incredible returns by buying into so-called “binary options.” This is a
type of options contract where the payoff comes only if a certain outcome
occurs on a specific financial asset. You make a bet on whether the price
of a stock, commodity, or currency will rise above or fall below a stated
level by a certain time. The term “option” is a misnomer, because buyers of
the contract do not actually have the opportunity to buy or sell the
underlying security, as they do with real options. A binary option is
essentially just a betting slip, similar to what you get at the races for a
bet placed on a horse to win.
It’s a scam because the con artists (usually based somewhere offshore) lure
you in with a few small early “wins” (all faked, of course). Once you’ve
been hooked, the binary options trading platforms will require you to
undergo a “credit check” and provide copies of credit cards, passport,
driver’s license, utility bills, and other personal data. And once they
have that (because it’s what they’re really after), they’ll have
effectively stolen your identity, allowing them to rack up thousands of
dollars on your credit card, and use your identity for even more nefarious
purposes. And you’ll never again see any money you’ve put up or any
supposed “winnings” from your binary options trades.
LIRA loan scam
You may get this come-on through an online solicitation, an e-mail or text
message, a recorded phone message, or even a personal call by a supposed
“financial advisor.” The fraud involves dangling the prospect of
“unlocking” money from your Locked-In Retirement Account (LIRA), without
tax consequences, and a special RRSP loan. The hook is that you sell your
existing LIRA investments and use the proceeds to buy shares of some fake,
fly-by-night company offered by the promoter instead. As a sweetener, the
promoter promises to lend you back up to 70% of the money you’ve
“invested,” with the rest being kept as a “service charge” or
“administrative fee.” In truth, victims of this scam end up with a
worthless investment and no loan – and no retirement savings.
The scam preys on older investors who may have substantial LIRA accounts,
and may have some need for the funds. But remember that a LIRA is designed
to be like a pension fund – conservatively managed, long-term, tax-deferred
savings until the maturity date, usually at 55 or older. It is not designed
for get-rich-quick investment schemes. Avoid these types of pitches like
How to avoid becoming a victim
The Ontario Securities Commission also offers five excellent best practice
tips for judging the legitimacy of any investment opportunity you may be
Always check registration and enforcement history before investing.
Be wary of giving out personal information (including credit card
information) by phone or online.
Never make a decision on the spot, even if pressured to do so (and the
pressure can be intense). Research the offer and review it with your
financial advisor. A legitimate investment will still be there tomorrow or
next week or next month.
Insist that written information (e.g., prospectuses, financial statements,
etc.) be sent to you. Review them with your financial advisor.
Understand completely what you’re getting into, including risks,
transaction details, mechanics of trading, reporting, and so on.
For more information on spotting and preventing fraud, check the
Canadian Anti-Fraud Centre. Finally, remember the old investing adage, “If it sounds too good to be
true, it is.”
Robyn Thompson, CFP, CIM, FCSI, is the founder of
Castlemark Wealth Management, a boutique financial advisory firm specializing in wealth management
for high net worth individuals and families. Contact her directly by
phone at 416-828-7159, or by email at
for a confidential planning consultation.
Notes and Disclaimer
© 2019 by the Fund Library. All rights reserved. Reproduction in whole or
in part by any means without prior written permission is prohibited.
The foregoing is for general information purposes only and is the opinion
of the writer. Securities mentioned are illustrative only and carry risk of
loss. No guarantee of investment performance is made or implied. It is not
intended to provide specific personalized advice including, without
limitation, investment, financial, legal, accounting or tax advice. Please
contact the author to discuss your particular circumstances.