Sadly, finding fraudulent transactions on a bank or credit card account isn’t uncommon in today’s world. Financial expert and author, Sandy Yong, walks us and our reader, Winnie, through how to fix the situation.
The question
There’s a fraudulent debit transfer from my bank account. What do I do? I came across a fraudulent transfer out of my bank account. I got in touch with my bank and they told me to fill out a statement of unauthorized debit form. They got back to me the next day saying they can’t refund me because “the funds are in their electronic systems.” After questioning the decision, the bank sent me a proof of payment letter. Which is essentially just a transaction history not proof that the transaction was authorized. Where do I go from here? I’m not exactly in the position to swallow a $1,500 fraudulent transfer.
Winnie B.,
Gander, NL
The answer
Hi Winnie,
That’s unfortunate to hear that you’ve been a victim of bank fraud. And isn’t helpful when your financial institution isn’t stepping up to protect you. Fortunately, there may be possible solutions to help you retrieve your money back, but it’s not guaranteed. Also, I’ve provided some more information on common scams and tactics that fraudsters use to help you with fraud detection.
How to recognize an unauthorized transaction
An unauthorized transaction is a bank or credit card transaction that you did not make or approve of. It can happen when your debit card or credit card is lost or stolen, or can happen by way of digital means. To further complicate things, when personal data is compromised there’s a greater possibility of identity theft. That being the case, if no mitigating steps were taken, someone can use your information to conduct fraudulent transactions without you knowing for a long time, often not before it’s too late.
Sadly, every financial institution will have varying definitions of what they consider an unauthorized transaction. So, you’ll need to read your debit card and account agreements in detail to understand what they deem to be an unauthorized transaction.
How the Canadian Deposit Insurance Company (CDIC) works
When you have banking services with one of the financial institutions, they provide insurance coverage through the Canadian Deposit Insurance Company (CDIC). Your chequing and savings accounts are protected up to $100,000 for each type of account.
The CDIC also provides coverage on investment accounts such as the Tax-Free Savings Account (TFSA), Registered Retirement Savings Plan (RRSP) and Registered Education Savings Plan (RESP).
However, they are limited in their coverage. For instance, they won’t protect you against fraud or theft. Also, they won’t protect your investments because the Canadian Investor Protection Fund (CIPF) covers those. They will, however, protect against scenarios such as a bank collapse.
In your particular case, while this is valuable information to know, unfortunately, because your case involves fraud, you won’t be able to rely on the CDIC to recover your funds.
Steps to take if your personal information is compromised
Here are five steps you can take to protect yourself if you or someone you know has been a target of a scam:
Step 1: Change your passwords immediately. Be sure to create unique and strong passwords that will be tough for a scammer to guess.
Step 2:Contact your bank or credit card provider right away to report any unauthorized transactions made on your card or account. Sometimes, you may need to report this incident within a specific time frame, which should be stated in your agreement. Typically, with chequing or savings accounts, you have 30 days from the date your statement is issued to dispute the transaction. Otherwise, you may be responsible for the transaction. If it occurred on your credit card, then the issuer should conduct an investigation.
Step 3: If you’ve shared personal information, you can contact a third-party credit bureau. Equifax or TransUnion can help to place fraud alerts on your accounts. It’s a good idea to check your credit report to verify any credit that you didn’t apply for.
Step 4: Report your incident to law enforcement such as the Royal Canadian Mounted Police, Canadian Anti-Fraud Centre, or call toll-free at 1-888-495-8501.
Step 5: Dissatisfied with how your bank handled your situation? You can file a complaint with the Financial Consumer Agency of Canada (FCAC). They can help investigate any cases mishandled by your financial institution.
Common types of scams
Your fraudulent debit transfer is one of many scams and frauds out there. With technological advancements, they are becoming sophisticated. Here are some of the most common ones that you should be aware of:
- Phishing text messages or emails crafted with the aim of acquiring your personal information.
- Bank impersonation scams occur when fraudsters pretend to be a bank or law enforcement official. They’ll call you and ask for the 6-digit one-time verification code, which you should not give to anyone.
- Investment scams entice you with high returns on your investments. This includes cryptocurrency, but they usually involve high risk.
- Catfishing is when scammers use someone else’s images and information to pretend to be that person.
Ways you can protect yourself from identity theft and fraud
Becoming a target of scams can be emotionally and financially taxing. Here are some ways to detect fraudulent activity.
Don’t share your personal or financial information. This includes your personal identification numbers (PINs), passwords, email addresses, phone numbers, debit or credit card information, or bank account numbers.
When you sign in to online banking, it’s best practice to enable multi-factor authentication as an added layer of security.
When you receive a phone call, check the caller’s identity to see that it’s coming from a trusted number. Also, if you get a text message or email, you can identify spelling mistakes or intimidating language which are red flags.
Remember, if someone asks you to take action on an urgent request, such as sending money, they’re trying to make you panic and make illogical decisions. Take a moment to step back and check that it’s a legitimate request from someone you know and trust.
Safeguarding you and your loved ones
Fraudulent activities in our increasingly cashless society are rampant in Canada. When you become a target of a scam, depending on your situation and how it occurred, you may be able to recover your money, but it’s not guaranteed.
On the bright side, fraud prevention strategies will help keep you safe, and there are steps you can take to report fraud. At the end of the day, it’s important to remain vigilant and not let your guard down when handling financial transactions.
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