Did you know that in 2020, about 41,000 Canadians fell victim to fraud and CRA scams, which cost them over $107 million collectively? That’s $11 million more than the amount lost to fraud in 2019.
If you are not one of the thousands of fraud victims, it doesn’t mean you will never be. It’s important to take a preemptive approach and learn about these scams before you learn by experience.
I’ve created this guide to help you learn more about the eight most common CRA scams and how you can avoid them.
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What Are CRA Scams?
CRA scams are simply scams perpetrated using the name of the Canada Revenue Agency (CRA). As the country’s main revenue agency and taxation body, the CRA’s name carries a lot of weight and legitimacy.
Because of this, scams that use the CRA’s name usually yield good results for perpetrators. People often don’t usually investigate too much when they believe that they are receiving money and that the CRA is simply calling to confirm their credentials or identifiable information.
Despite the CRA continually informing Canadians about tell-tale signs of communications that legitimately come from the department, scammers still manage to find ways to fool people.
Still, with proper care and a little healthy suspicion for every bit of communication that asks for your identifiable information or financial details, you can avoid falling victim to some of the most common CRA scams.
The Eight Most Common CRA Scams
There are eight common CRA scams you need to be especially wary of:
1. CRA Phone Scam
Phone calls, especially from spoofed or barred numbers or numbers fpsimilar to those you are used to receiving CRA calls from, are among the most favourite communication channels of scammers. There is nothing like the sense of urgency and authenticity that a legitimate-sounding phone call conveys.
Scammers usually pretend to be from the CRA and try to entice fear to encourage you to do something. It may be an activity as simple as calling them back on a specific phone number, which you might not find suspicious but can have disastrous consequences.
Below are some examples of CRA scam calls:
- A call where they scare you into thinking that you’ve committed tax fraud, and the CRA has registered a case against you.
- The caller creates a sense of urgency by telling you that you must call the CRA back before taking specific steps.
- The caller tells you that the CRA is making a lien on your property or bank accounts because you haven’t fulfilled your financial obligations.
What you can do:
Ask about the caller’s name, their position, and the office they are working in. Tell them that you’d verify with the CRA hotline before complying with their requests.
If you keep your calm, the scammers may betray themselves on the spot. But it would still be a good idea to report them.
2. CRA Email Scam
Email is currently one of the most extensively used medium of official communication. The CRA uses emails to connect with taxpayers.
Unfortunately, scammers leverage that to send you phishing emails (i.e., emails that take you to fake, though legitimate-looking, look-alikes of the CRA portals). If you put in your credentials there, scammers may steal them.
The CRA will send you a link only when you ask for it, either on the phone or in an in-person interview with a CRA agent.
The CRA does not usually send an email asking you for immediate payments or personal or financial information. They also do not usually send a link out of the blue nor threaten you with legal action.
In general, fraudulent emails do the following:
- Tell you that you’ve received money from the CRA;
- Ask you to pay money to the CRA; and
- Inform you about a supposed tax refund, which is the most common CRA email scam.
What you can do:
If you get an email like this, analyze the content and the email address. You might find clues of its illegitimacy there. If you can’t, contact the CRA just in case.
This also applies to any other email that asks for your information and tells you that you need to fill a form or click a link to send payments to or receive payments from the CRA.
3. CRA Text Scam
The CRA explicitly ensures that it will never send people texts or messages on social media about tax-related information or financial transactions. They also do not send texts verifying whether your Social Insurance Number (SIN) has been stolen.
Any text that claims to be from the CRA and contains a link, guides or entices you to take a particular action, or requests information from you is most likely a scam.
Text scams are usually less potent than other types because they are not the CRA’s favourite communication channel, so they typically fail to mimic legitimacy.
What you can do:
If you get a shady message claiming to be from the CRA, ignore and report it.
4. CRA Mail Scam
When it comes to faking authoritativeness, few things match the good old paper. An authentic-looking, hard-copy mail from the CRA might have a better shot of confusing you about whether it’s actually from the CRA. No thanks to advances in technology, it has gotten relatively easier to fake stamps and signatures.
A clever and resourceful scammer might make it nearly impossible to tell whether a letter you’ve received in the mail is the real deal or not. The only effective way of verifying its authenticity might be to trace it to its origin, i.e., asking the CRA about it.
The problem with mail scams is that the CRA usually employs mail for a lot of relevant communication:
- To ask for financial information;
- To provide assessment/reassessment notice;
- To ask for payments (but only through legitimate CRA’s payment option); and
- To provide notice of legal action.
But none of the CRA letters will encourage you to meet with an agent outside the designated CRA offices nor suggest that you pay the CRA back through an unconventional method.
What you can do:
If you think you’ve received a mail that’s not from the CRA, log in to your CRA portal to see if you owe the department anything. You can also compare your document to your past ones or contact the CRA to verify whether they sent you that mail.
5. CRA Payment Method Scam
The CRA accepts payments from several different channels: online payment avenues, credit card, PayPal, Interac e-Transfers, in person, cheque, or a service provider.
It doesn’t mean that scammers won’t use these methods to divert your payments. However, they might be difficult to imitate.
The CRA does not accept payments via cryptocurrencies, prepaid cards, or gift cards. They also never ask for immediate payments.
What you can do:
If you receive a payment request claiming to be from the CRA that is not in line with CRA’s typical payment method, report it.
6. CRA Newcomer Scams
Newcomers in Canada are often scared out of their wits by calls and emails that seem to be from the CRA or the Immigration, Refugees and Citizenship Canada (IRCC).
However, if you are new to the country, remember that neither department will call nor email you to collect any fees or fines. They also will not threaten to deport you nor ask you for new information or verify the information you’ve already provided. They also will not ask you to immediately pay any fees or fines using services like Western Union, gift cards, or prepaid cards.
What you can do:
If you receive any such phone call or email, ask the caller about their name, designation, and office. Afterwards, call the relevant department and verify whether the call or email you received originated from there.
7. Situational CRA Scams
COVID and COVID-related CRA payments proved to be a hotbed of scams and frauds. Numerous people were duped into sharing their details, got payments when they didn’t ask for them, and didn’t get their due because someone else collected it instead. The reason why those scams succeeded was panic and confusion.
Hopefully, we will not see another calamity like this pandemic soon. However, it’s important to remember that when the CRA announces any emergency relief payments or issues guidelines regarding taxes, fees, or other financial transaction that needs to take place between you and the CRA, the scammers might try to take advantage of that.
8. CRA Charity Tax-Shelter Scams
Donations to eligible and registered charities are a great way to give back to the community and humanity and get some tax deductions. But scammers use them to con people, too.
If you are giving money to the charity, and the charity offers to write you a receipt for an amount higher than the one you paid (so you can supposedly get a more substantial deduction), be wary. It might not be a legitimate charity to begin with because they have to reconcile their numbers as well.
How to Protect Yourself and Avoid CRA Scams
Apart from the specific measures you can take to protect yourself from CRA-related and other scams and frauds, there are a few other things you need to know about:
Secure your SIN
Never divulge your Social Insurance Number (SIN) lightly. Relatively few entities and individuals can ask for your SIN, and you should know who they are.
If someone other than your employer, relevant regulatory bodies, financial institutions, and social assistance benefit providers, among others, asks you for your SIN, verify why they need it before divulging this crucial piece of identifiable information.
A legit SIN can be used for several nasty scams that you don’t want to fall victim to.
Keep Identifiable and Financial Information Safe Online
Our lives are so intertwined with the internet nowadays that we depend on it for almost everything, including our financial transactions and tax obligations.
Because a lot of your identifiable data and key pieces of information about your finances go through the internet, it’s imperative that you pick up some good security habits. Here are some examples:
- Choose strong and unique passwords and opt for two-factor authentication.
- Don’t share your financial or identifiable information like SIN on social media.
- Learn how to secure your devices and check the security of your internet.
- Only provide your credit or debit card number for online transactions to legitimate e-commerce businesses or payment facilitators.
If your password is compromised, make sure you change that password on all your online accounts. Using multi-factor authentication, especially for bank accounts or critical online accounts, can save you from many scams and frauds.
General Fraud Protection Tips
Here are a few things that might help you avoid scams and frauds:
- Be suspicious of any form of communication that tries to instigate a sense of urgency and compel you to take immediate action, whatever it may be.
- Don’t get intimidated by people claiming to be from the CRA, police, or any other high-authority position or department, even if they have your personal information. Talk to them and get as much information as you can about what they are supposedly trying to scare you for. Either their story will fall apart, or you will have more information to give to the Anti-Fraud Centre.
- Always be wary of sharing any personal information, even your name. If someone from the CRA called you, they would have your information already, and they will usually ask you to verify it after providing it themselves.
- Research unknown numbers and entities that try to contact you using the name of the CRA or any other regulatory body. Oftentimes, just popping the contact number in a search engine can help you identify whether it’s a fraudulent or legit number.
- Develop the habit of never clicking on any link in an email or message. If you didn’t press “forgot password” on any of your online login portals, and you get a password reset email claiming you haven’t done so in a while, it’s most likely a scam.
Scammers often try to lure you in by sharing some of your information with you. However, remember that a lot of your information may already be available on the internet, which anyone can access.
So, if someone tries to get more information from you, especially financially relevant data, and leverage information about you that anyone can access, be wary of that.
How to Report CRA Scams
If you have already been scammed and are a victim of fraud, contact your local police and relevant authorities.
For example, if you know your credit card is being used by someone else, immediately call your credit card provider to get it frozen and then inform the police.
Similarly, if you have divulged sensitive taxation information or your SIN to someone, contact the Canadian Anti-Fraud Centre (CAFC) immediately. They may guide you on how to contain the situation, and you might need to contact the CRA to get ahead of any potential damage that your information might do to your financial relationship with the State.
You can report anything online at any time of the day by logging into the online portal. You can also call the CAFC at 1-888-495-8501 during office hours.
It’s important to remember that you can even report scamming attempts to the CAFC and other relevant authorities. This will provide them with pertinent information that can help prevent others from becoming victims of those scams.
I hope the list has been educational in informing you about the most common CRA scams and what you might do to avoid them. New and ingenious scams are a norm, and so are the relevant prevention tactics.
If you know about any new CRA scams that you think people need to know about, share them in the comments.