These tips can help you avoid a scam

The Better Business Bureau has released its 2023 Scam Tracker Risk Report, which shows that investment scams are among the costliest scams affecting Canadians.

The report, released Monday, ranks investment and cryptocurrency scams together, as most crypto scams involve some type of phony investment scheme. The BBB says 80.4 per cent of the people who reported a scam involving fraudulent investments or cryptocurrency to the BBB Scam Tracker last year lost money. The median amount lost was $3,800, the highest on the top 10 list of riskiest consumer scams.

• READ MORE: BBB Scam Tracker Risk Report

Crypto and investment scams are most commonly found on social media, says the BBB's Jadyn Yelle.

"They (the victims) are promised high returns on risk-free investments, but this isn't how it ends up for them," she says. "Typically, what ends up happening after they've invested into an account with cryptocurrency, they're unable to retrieve any of their funds, if it's a scam."

Employment scams ranked second-riskiest behind investment and crypto scams. The BBB says the percentage of reports for this scam type rose to 14.8 per cent in 2023. The reported median dollar loss for employment scams rose from $1,500 in 2022 to $1,995 in 2023. Employment scams were considered the riskiest scams for people aged 18 to 44, with investment and cryptocurrency scams tending to target adults 45 and older.

"In this case, people apply to jobs and they either believe they're applying to a new positions or they've just been hired to a new position, but what they've really done is given out their personal information or money for training or new equipment," says Yelle. "People who are looking for jobs are considered vulnerable. They'll pay money to ensure a job and, unfortunately, it's not a real job."

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Romance scams also climbed up the list to fifth in 2023 from seventh in 2022, in large part because more people reported being scammed out of money. The percentage of those who reported losing money to romance scams rose 308.1 per cent in 2023, with median losses of $3,600, up 155 per cent from the year prior.

Scams can target anyone of any age and anyone can fall prey to a scammer. The BBB's report found that young adults aged 18 to 24 lost more money on average than any other demographic, with a median dollar loss of $155, followed by seniors 65 and older, who had a median loss of $109. Women were more likely to report scams to the BBB, but men reported a higher median dollar loss. 

General tips to avoiding a scam

Avoid making quick purchases while browsing social media.

"Reports of scams being perpetrated via social media increased 63.8 per cent from 2022 to 2023," the BBB says. "Take time to research the website that is offering that amazing deal to make sure it isn't fake."

Be very cautious engaging with someone you've met online.

"Make sure you don’t share personal details with somebody you haven’t met in person," the BBB says. "If they begin to ask for money or offer a no-risk investment opportunity, it’s a red flag."

Don't click on links or open attachments in unsolicited email or text messages.

"If the person claims to be somebody you know or a well-known organization, contact the person directly or go directly to your account to confirm the details," says the BBB. "Impersonation was reported as the most common tactic used to perpetrate scams."

Don't believe everything you see or read.

"Scammers are great at mimicking official seals, fonts, and other details. Just because a website or email looks official does not mean it is. Even Caller ID can be faked," the bureau says.

Take precautions when making online purchases.

The BBB has three tips to make your online shopping safer:

• Don’t shop based on price alone. Scammers offer hard-to-find products at great prices.
• Don’t buy online unless the transaction is secure. Make sure the website has https in the URL (the “s” is for “secure”) and a small lock icon on the address bar. However, even secure websites can be fraudulent.
• Do more research on the products and the business before you make the purchase.

Know the general red flags of scams.

Here are some common red flags to watch out for:

• The offer sounds too good to be true.
• The person insists you must act immediately, or the deal ends soon.
• Somebody asks you to deposit money into a Bitcoin ATM or sends a check and asks you to deposit it and then transfer the funds.
• They require an up-front payment before a service is provided.

Never disclose personally identifiable information to an unsolicited contact.

"If somebody asks you to share your SIN or your driver’s license number, consider it a red flag and proceed with caution," the BBB says.

Take your time. Don't be pressured to act immediately.

"Instead, do your research or discuss the situation with a third party," says the BBB.

Use secure, traceable transactions when making payments for goods, services, taxes, and debts.

"Prepaid/gift cards, for example, cannot be traced. They are intended to be used as gifts, not as payment," the BBB warns.

Whenever possible, work with businesses that have proper identification, licensing, and insurance.

"Research the company first at bbb.org."