Tax Season is Here: Avoid These Common Scams Targeting Canadians

Tax return preparation might be a little more complicated this year than usual for many Canadians with millions receiving Canada Emergency Response Benefit (CERB) payments and about 40% of the Canadian labor force turned to self-employment options to help them financially weather the pandemic storm.

Where there’s money and uncertainty, you’re likely to find scammers. After all, scammers tend to capitalize on uncertainty and use it as the entry point for their attacks. Whether it’s through a phishing email with a phony notice of reassessment, a text message threatening arrest, or a fake phone call from the Canada Revenue Agency (CRA), hackers often employ elements of fear in their attacks. McAfee’s 2021 Consumer Security Mindset study revealed that roughly 2 out of 3 Canadians (65%) plan to do their taxes online in 2021, with 12% of them doing so for the first time. With the increase in activities online, consumers are potentially exposed to more digital risks and threats, and knowing how these hackers tend to work doesn’t mean you have to live in fear. To help you identify and avoid potential threats, let’s take a look at some of the most common scams that hackers use during tax season.

Phone scams

Phone scams take one of two primary forms:

Robocalls – Pre-recorded message by a person or a voice-to-speech app that allows scammers to reach thousands of potential victims. The message may direct the recipient to call a number or visit a site that will attempt to steal their personal or financial information. In some cases, it may direct them to a phony call center that will try to collect payment for a bogus debt.
Imposter calls – This occurs when a person posing as a CRA representative falsely claims that you owe money and demands that you make immediate payment. Scammers can take various approaches here, such as threatening arrest or license revocation. It’s important to note that the CRA will never resort to these tactics even if there is an issue with your tax return.

Some sophisticated scammers will weave stolen personal or financial data that they purchased on the dark web into their calls, such as bank or social insurance information. They intend to make their phony claims sound legitimate, hoping that an unsuspecting user will hand over their data or make a fraudulent payment.

So, what does a real call from the CRA entail? The CRA clearly outlines the reasons they’d be calling on their 2020 Tax Tips page and ways that you can follow up with the CRA to determine if a call is legitimate.

Email phishing scams

There are two instances where the CRA may contact you by email. One is during a telephone call or meeting with a legitimate CRA agent. The second is to send you a notification that you have a message or document for your review on a secure CRA site such as My Account, My Business Account, or Represent a Client. Anything else is likely a scam.

The one time where the CRA will send you an email containing links is if you have a call or meeting with an agent, as outlined above. Otherwise, you can be confident that an email with links is a scam.

Text and instant message scams

This one is relatively straightforward: the CRA will never contact you via text, instant messaging, Facebook, WhatsApp, or any similar messaging service. If you receive such a message, delete it, and don’t click on any links embedded within it.

Tax payment scams

In many cases, hackers will aim to separate you from your money by demanding immediate payment in some form or other. They may request payment in pre-loaded debit cards, gift cards, e-transfer, or even bitcoin. Know that the CRA will never request payment in any of those forms.

When in doubt, ask yourself why this email or phone caller is demanding that you act immediately. Have you filed on time? Have you received written notice from the CRA already? Do you owe an installment payment? If the person contacting you leaves you unsure, you can confirm that the contact was legitimate by calling the CRA.

Stay protected from fraud and theft this tax season

While recognizing the signs of tax-related fraud can help ease the burdens associated with these schemes, there are multiple steps you can take to prevent becoming a victim of tax scams in the first place. Follow these tips to stay on top of your tax return while securing your digital life:

Use password protection as a first line of defense

Devices benefit from physical security. This is as simple as locking your smartphones, tablets, and computers with a PIN or password. Should one of those devices get lost or stolen, a lock provides a barrier for those who might try to access your personal and financial information on them.

Use a holistic security solution

Protecting your devices with comprehensive security software can help block the phishing emails and suspicious links that make up many of these tax attacks. Likewise, it can further protect you from ransomware attacks, another type of tax scam on the rise, where crooks hold your data hostage for a price. All in all, security software is always a smart move—tax time or any time.

Dispose of your old technology and data securely

Consider what’s on your old computer hard drive or stored away on your phone. Old devices tend to contain loads of precious personal and financial information. Look into the e-waste disposal options in your community that will recycle your old technology and do so securely.

Look after your physical security as well

While so many of our finances are handled electronically today (taxes included), we’d be remiss if we didn’t talk about physical security as well. Mail and porch theft still occur, which is one more way a thief can steal your personal and financial information to use in a scam. A locking mailbox is a purchase you may want to consider if you don’t have one already.

Think you’ve been a victim of a tax scam or identity theft?

Recognizing the signs of tax-related fraud could allow you to take action and significantly suppress the repercussions. If you suspect you’ve fallen victim to fraud or believe that you’ve been tricked into giving away personal information as part of a scam, contact your local police service and make a report.

By staying proactive and vigilant, you’ll be in a better position to protect your identity and your data—and live your digital life with safety at the forefront.

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Tax Season is Here: Avoid These Common Scams Targeting Canadians