Most fraud victims don’t tell anyone what’s happened to them because they’re embarrassed to admit they’ve been duped. In fact, it’s estimated that only 5% of victims report the crime. That’s problematic because failure to report fraud is the number one reason why scams spread so quickly and harm so many people.
Frauds today aren’t as simple as they used to be. Many are sophisticated, complex and hard to detect. Most perceptions of fraud are actually misconceptions that lull people into thinking it’s not a serious problem in Canada. Nothing could be further from the truth. Canadian fraud losses are estimated to be between $10 and $30 billion dollars every year, a figure comparable to criminal drug revenues.
What you don’t know about today’s frauds can hurt you. Here are a few myths and truths:
Myth #1: Smart people don’t fall for scams.Fraud prevention experts have always warned people to avoid deals that seem too good to be true, but today’s frauds, presented primarily via the internet or over the phone, are so intricate and believable that even cautious, well-educated people regularly fall for them. As frauds become more sophisticated, they become much harder to recognize and avoid.
Fraud victims come from all socio-economic groups and all levels of education, so if you’ve been victimized, please know that you aren’t alone. Don’t let shame keep you from speaking out. No one will think you’re stupid for reporting a fraud to the police and to the Canadian Anti Fraud Centre. Every call counts – yours could provide the missing information that finally renders a scam ineffective.
Myth #2: That’s what you get for being greedy.
It’s human nature to want something for nothing and that inclination leads many people to jump at scams that promise quick, easy cash. While some fraud victims are indeed greedy, the majority of them are decent people trying to either get themselves out of debt or make life better for their families. Someone who’s at a financial disadvantage is particularly susceptible to a fraudulent offer because it offers hope.
Myth #3: Fraud is “white collar crime”.
This attitude presumes that most frauds are non-violent crimes perpetrated by clean-cut, briefcase-carrying business people. While that may be true of some investment schemes, the reality is that 80% of frauds in Canada are conducted on a massive scale by organized crime groups – the same ruthless criminals who deal drugs and control the sex trade.
Organized crime groups are able to diversify. They become involved in any type of crime that makes money and right now they see fraud as ideal because the penalties are still relatively minor compared to the vast profits. The more of your money that winds up in the hands of organized criminals, the more guns and drugs wind up in our communities. In other words, the more destabilized our society – and our national economy – becomes.
Myth #4: Fraud doesn’t really hurt anyone.
Just because your bank or credit card company reimbursed the funds stolen from your account, don’t think all fraud victims get their money back.
Life savings, retirements savings, homes and businesses, and in some cases even lives, have all been lost to fraud. Seniors who’ve been swindled out of their retirement nest egg suddenly find themselves living in poverty and have no choice but to rely on Canada’s social security systems. Financial hardship leads to high levels of family stress, which can lead to marital break ups, spousal abuse and psychological and physical harm to children. People who’ve lost everything are sometimes so devastated they commit suicide. Clearly, fraud has victims, millions of them. Some people get their money back and return to their normal lives with nothing but a cautionary tale to tell. Most aren’t so lucky.
Not only does fraud have a devastating impact on individuals and families, it damages Canada’s economic integrity. To compensate for fraud losses, businesses raise their interest rates and service fees, thereby spreading fraud pain around. When people stop trusting the security of their financial transactions, our economy slows down.