Identifying and Avoiding E-transfer Scams

Fraud is a big problem in Canada. Nearly half of Canadians have become victims of scams at some point in their lives. And unfortunately, the rise of online banking plays a role in this.

It’s easier than ever to make transactions, but at the same time, it’s frustrating because fraudsters have also hopped on board to take advantage of unknowing users.

One of the best ways to send money in Canada is through email money transfer, e-transfer for short. It’s fast and easy, letting you send money to friends, family, and businesses within seconds.

But despite the tight security measures put in place by online banking and money transfer services, scammers still find ways to get in. It’s important for you to be aware of the risks.

Knowing how to detect the most common e-transfer scams, as well as how to protect your account, can save you from unnecessary stress. That’s why we’ve put together this guide – to help you stay in the know and safe from scams.

Are E-Transfers Secure?

Nine in ten Canadians use e-transfers for their daily transactions. So, it’s no surprise that scammers see it as a hot target. And with so many people using it, are e-transfers still safe?

What we should clear up first is that no money is sent through email or text with an e-transfer. They only notify you. The transaction itself happens securely through your bank. Much like any other online banking transaction, e-transfers are protected in multiple ways:

Encryption: Makes your data unreadable to outsiders.
Two-step verification: An extra layer of protection requiring more than just a password.
Automatic deposit: Money goes straight to the recipient’s account, so there’s much less risk of it getting stolen.

These measures make it hard for anyone but you or the intended recipient to access the money. This is why it’s so unfortunate that scammers still find ways to sneak in. They often use phishing emails, fake websites, and many other tricks to steal your personal information.

Types of E-Transfer Scams

Technology has made it easier than ever to manage our finances. But this has also opened the door to scams – and they’re really common for those who don’t pay close attention.

Here are the different types of e-transfer scams so you can stay one step ahead of fraudsters. Know these common scams and how to spot them before it’s too late.

Commandeered E-Transfer Scam

The commandeered e-transfer scam is probably the hardest to catch. It happens when a hacker using malicious software takes over your device. This gives the scammer access to your online banking and email accounts. They can then monitor your transactions and steal sensitive information, like passwords. When they get complete access, it’s hard to retrieve.

They can divert the funds to another account without you even realizing it. You’ll only receive confirmation that the transfer went through when it’s already too late.

How To Spot a Commandeered E-Transfer Scam

Here are some warning signs that your e-transfer may have been commandeered:

The transfer doesn’t arrive on time.
The recipient can’t accept the transfer because it’s already been accepted.
You get a request to answer a security question for a transfer you didn’t even initiate.
The security question is too predictable.

Image Source: Pexels

Marketplace Scam

You may already be familiar with an online marketplace. It’s the place to be when buying and selling items. But popular marketplaces like Kijiji, Craigslist, and Facebook Marketplace are also a favourite for scammers. Here’s how this scam usually works:

You agree to buy from a seller who promises to deliver the item, but their bank account is fraudulent.
You’re selling something, and the buyer claims that they’ll transfer the money after receiving the item, but they disappear once they have it.

Whether you’re the buyer or seller, you lose out. Your money is taken away, and you could lose the item, too. The bank may also reverse the transaction, so your account gets stuck.

How To Spot a Marketplace Scam

Be on the lookout for these red flags when transacting online:

The buyer/seller only agrees to send money or products after they receive the goods or payment.
They’re overly pushy or suddenly stop responding to messages.
The transaction happens too fast, leaving you no time to second-guess it.

Fraudulent Cheque Scam

Fraudulent cheque scams are another tricky one. The scammer deposits a fake cheque into your account, and before the bank can flag this as fraud, they transfer the funds from your account to their own. You might not realize something is wrong until the cheque bounces and your account is flagged.

This type of scam often involves two people. And until the bank sorts out who’s at fault, you might be seen as an accomplice.

How To Spot a Fraudulent Cheque Scam

Here’s how to tell if you’re caught up in a cheque scam:

Your bank card stops working, or your account is blocked.
You receive a notification that an e-transfer was accepted, which you never sent.

Pet Scam

Buying pets online has become more common. But it’s also become a playground for scammers.

It’s pretty elaborate. They set up fake websites with convincing pet profiles, including reviews and breeder licenses. They’ll then ask for an e-transfer deposit, promising to deliver the pet. But just like marketplace scams, the animal never arrives. So you’re left without a pet, and your money is gone.

How To Spot a Pet Scam

Here are some signs the pet up for sale isn’t real:

The seller asks for a large deposit or shipping fee.
They request multiple transfers to different accounts.
They won’t answer your questions or stop responding altogether.
The animals they’re selling seem too rare or exotic to be easily available.
They refuse to let you meet the pet in person.

Job Scam

Frustratingly, scammers also prey on people looking for work. In this elaborate scam, a fake employer will contact you about a job that’s all too perfect. Sometimes, they’ll ask you to accept and send out e-transfers as part of your job. What they don’t tell you, though, is that the money was stolen from someone else’s account.

Your bank will eventually flag your account because you’ve accepted fraudulent money. This will leave you unable to conduct transactions until they’ve sorted things out.

How To Spot a Job Scam

Look out for these signs of a job offer that’s too good to be true:

The employer contacts you out of the blue, saying they found your resume online.
You receive a job offer without applying for the position.
The salary is unrealistically high, and the job requirements are vague.
They ask for personal or financial information before you’ve even started.

“Government Official” Scam

In a “government official” scam, scammers create fake profiles that look identical to real government officials, or any official organization. They use these fake profiles to convince you that you’re dealing with someone in power. These scams ask you to act fast, usually claiming that you’re in trouble with the government.

How To Spot a “Government Official” Scam

Here are some signs the person contacting you isn’t who they claim to be:

They say they’re from an organization you recognize but contacted you unexpectedly.
They claim that you’re in legal trouble or there’s an urgent issue with the government.
They pressure you to act immediately.
They ask for a payment through e-transfer or money transfer.

Image Source: Unsplash

What To Do If You’ve Been Scammed

Nothing’s more stressful than getting scammed. But taking quick action can minimize the damage. Here’s what you immediately need to do if you’ve fallen victim to an e-transfer scam:

Contact your bank to stop the transfer or help secure your account.
Update any passwords you have for online banking, email, and other accounts right away that might be affected.
File a report with your local police and the Canadian Anti-Fraud Centre.
Look for any suspicious activity and place a fraud alert or freeze on your credit if it’s needed.
Regularly monitor your bank and credit accounts for any more unauthorized transactions.

Remember to act quickly and calmly. The sooner you take these steps, the better your chances of recovering your funds and protecting your personal information.

How to Prevent E-Transfer Scams

Preventing e-transfer scams requires vigilance and simple precautions. Here’s how you can keep your money and personal details safe:

Make sure that your email and banking accounts have strong, unique passwords that are hard to guess.
Turn on two-factor authentication as an added layer of security to your accounts.
Always confirm that you’re sending money to the right person.
Choose hard-to-guess answers to your security questions.
Sign up for e-transfer auto deposit so that any money sent to you goes directly to your bank account, so there’s a lesser chance scammers will get their hands on it.

Staying aware of these scams and knowing what to look for can help you avoid falling victim. Trust your instincts – if something feels off, take a step back and double-check the details.

Final Thoughts

E-transfer scams can be a real pain. The key here is not to be overly cautious but to stay informed and proactive. By taking simple precautions and staying updated on the latest scams, you can protect yourself from fraud.

And if you need quick and flexible financial solutions, LendForAll is here for you. Our loan options are designed to give you the support you need when it counts the most.

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Nick Saraev

Nick Saraev is a Vancouver-based writer and entrepreneur with a focus on business and personal finance. His work has been featured in Bloomberg, Apple News, and Popular Mechanics. He is also an Amazon Kindle best-selling author.