Identifying and Avoiding E-Transfer Scams

E-Transfer Scams

People use online banking more and more, with e-transfers being one of the most used tools to easily send or receive money. Unfortunately, the popularity of e-transfers has attracted criminals who steal money and information from users, most notably by using e-transfer scams.

While financial institutions and lending companies continuously find new ways to protect their clients from e-transfer frauds and crooks, there are still many instances of these crimes.

What are the Most Common E-Transfer Scams?

Email transfer scams are used by hackers and internet criminals to trick users who commonly send or receive money from online bank accounts. The following are the most popular types of e-transfer scams in Canada:

The Commandeered E-Transfer Scam

Out of all the types of e-transfer scams, this type can cause serious loss and is most difficult to detect. When sending or receiving an e-transfer, a hacker or malicious software like spyware or malware can hack the device being used to gain entry into your online banking or email account. Once the scammer has access to your accounts, they can review your transactions and uncover your account details, including banking passwords.

When a scammer has gained your personal information, the next online money transfer you send or receive will have a link to your bank account. From there, the fraudster can uncover or guess the security question to access the transfer, which is why it is important to make the answer unique and not something obvious like your name or address. After that, the scammer can redirect the e-transfer to a different account without you noticing since all you get is a confirmation email stating that the funds have been accepted.

How to detect this scam:

  • Delay in receiving the transfer
  • Recipient cannot accept the transfer, as it has already been accepted
  • Email or SMS from recipient requesting transfer security answer
  • Security question/answer is too easy to guess

Tips for closing a personal bank account.

Marketplace Scams

Facebook Marketplace, Craigslist, and Kijiji e-transfer scams happen more often as more users rely on these sites for local goods and services. Online marketplace scammers conceal themselves as sellers take advantage of buyers by using these tricks:

  • You make a deal to buy an item or service from a seller, send them the money, and then discover that their bank account is frozen or setup fraudulently.
  • You agree to sell an item or service, but the buyer will only pay after receiving the purchase. Their account is blocked or falsified.

Using these techniques, the scammer will achieve their goal of leaving you empty-handed while they spend your money. Reporting these types of crimes to your financial institution can cause more headaches, as they may not be able to assist you further, and can even result in them assuming that you are the perpetrator and freeze your account.

How to detect this scam:

  • The buyer will only transfer you the money after receiving goods or service
  • The seller requests the money before delivering goods or service
  • The buyer/seller is pushy, impolite, or ignores your messages
  • The buyer/seller is quick to buy or sell before you have a chance to second-guess the exchange

Tips for transferring money between bank accounts.

The Fraudulent Cheque Scam

Check kiting is a type of check fraud that involves using checks to access funds that aren’t available in a bank account by taking advantage of the time for checks to clear, which is usually around three days but can be longer for international checks.

Before you have a chance to explain your innocence, your financial institution may question whether or not you were a co-conspirator in this cybercrime. Being aware of the ways a fraudulent cheque scam and cheque kiting can happen is the best way of protecting yourself from these types of crimes.

How to detect this scam:

  • You receive an alert that an e-transfer that you did not send was accepted
  • Your account is frozen and/or your bank card declines purchases

Learn more about bad cheque scams in Canada.

The Cute Pet Scam

Many pet sellers and breeders use online marketplaces to find interested customers. A popular Facebook Marketplace, Craigslist and Kijiji e-transfer scam is to create fake accounts that appear legitimate to sell adorable and in demand pets, complete with fake certificates.

Popular breeds of animals can be very expensive, so to guarantee that the buyer is a committed customer, the seller may request an e-transfer instead of a credit card payment. The scammer impersonating a pet breeder will ask for either a partial deposit or full payment first before the animal is delivered to you. Once the money is sent to the scammer, they will not respond to any more messages. The buyer’s money is gone, and of course, no new pet. It also results in a security threat to your bank account.

How to detect this scam:

  • The breeder is selling exotic, uncommon, or illegal pets in Canada
  • The seller requires a hefty deposit or payment for the animal
  • The breeder is shipping the pet from a far-away province or another country
  • The seller requires several e-transfers to multiple accounts
  • The breeder requires payment before showing or handing off the pet
  • The breeder has no valid certificates, address, or personal/professional details
  • The seller avoids any contact with the buyer after the money is sent

What to do if you’ve been a victim of e-transfer fraud.

The Employment Opportunity Scam

With this scam, a message will be sent to you directly on a career website or an email will be sent that appears to be from Glassdoor, LinkedIn, or Indeed, with details regarding a job opportunity that seems like a great match. The details presented for the position often come with too-good-to-be-true salaries and benefits. The job in question may seem too easy, such as handling simple financial tasks like withdrawing money from accounts to send elsewhere or accepting and sending e-transfers to people you do not know.

The reality is that you may be unknowingly stealing money from other victims and transferring their money through your personal account to another unknown online account. Once your financial institution catches these fraudulent transactions, your account will be flagged and frozen. You will then have to prove your innocence, while the scammer gets to enjoy the money they received from having you as an accomplice in their crimes.

How to detect this scam:

  • You never applied for the job being presented
  • You cannot verify the details about the business or job
  • The salary and benefits are well above standard for the position
  • You are being asked by the employer what your bank details and withdraw limits are
  • The employer verifies that you are able to send/receive e-transfers
  • You are required to deposit money at a bitcoin ATM
  • The employer sends/receives e-transfers from accounts unrelated to the business

Learn how to avoid wire transfer fraud.

What Steps Should I Take If I Have Been a Victim of an Email Transfer Scam?

Online scammers take advantage of any security weaknesses that can benefit them. When attacks are made on users through their bank accounts, most financial institutions will not credit your account back with the stolen money, especially if the loss was not their fault.

If you have been scammed through an e-transfer, there are a few steps that you can take to protect yourself:

  • Contact your bank as soon as you become aware of the fraudulent behaviour. They may be able to cancel the transaction before the money is accepted. They will also be able to monitor the transaction and investigate the case to prevent further incidents.
  • Report the crime to the authorities as they keep track of these cases to prevent similar attacks and can investigate and try to resolve your case.
  • Review your online banking agreement to understand what they are responsible for in these kinds of instances and what is required on your end to stay secure.
  • Change your banking details to avoid any further fraudulent activity and increase security to monitor your account for suspicious behaviour.

What Can I Do to Prevent Being a Victim of E-Transfer Scams?

People frequently wonder, “Can I get scammed through an e-transfer?” or “Is e-transfer safe?” The answer to both questions is yes. The suggestions below can help you protect yourself from being the target of an e-transfer scam:

For Money Senders:

  • Avoid accepting an e-transfer from someone you don’t know
  • Come up with a unique security question that only the recipient will know the answer to
  • Avoid sending the security answers through email, text, or social media
  • Update security questions and banking passwords often
  • Have different security questions/answers for each recipient

For Money Recipients:

  • Keep all transaction information and receipts
  • If you get an e-transfer from someone you don’t know, research the sender before accepting
  • Be suspicious of unsolicited e-transfers, job opportunities, and requests from unknown users
  • Ask the sender to change security questions/answers frequently
  • Request the security answer through secure methods only
  • Update banking passwords frequently

Register for E-Transfer Auto Deposit

While it may seem counterintuitive to allow automatic deposits to your account, auto deposits can offer extra protection against e-transfer scammers. Using auto deposits allows transferred funds to enter your bank account directly without a cybercriminal getting a chance to have easy access.

To better secure future auto deposits of e-transfers, implement the following tips:

  • Create difficult-to-crack passwords for your email address and bank account
  • Open an email account with limited personal details that are only for e-transfers
  • Make sure that you trust the source or person before sending or receiving an e-transfer.
  • Send a small trial deposit to verify the account before sending a larger e-transfer
  • Make a habit of reviewing your banking information to catch security breaches early
  • Notify your bank before accepting or transferring any money to unknown sources

Is My E-Transfer Safe?

Most email transfers are safe, but if you ever have doubts about sending or receiving funds online, contact your financial institution to verify, in addition to reading more about how do email money transfers work? Before you accept an e-transfer from someone you don’t know; if something doesn’t feel right, it probably isn’t, so trust your intuition to double-check all details before you end up in a tricky situation.