A new anti-fraud alliance aims to share data and improve scam prevention
Canadians are losing hundreds of millions of dollars to fraud each year, with reported losses climbing by 40% in just one year.
In 2022, Canadians lost over $530 million to scams, according to the Canadian Anti-Fraud Centre (CAFC). However, experts believe the true figure is much higher, as only a small fraction of fraud cases are reported. The Canadian Bankers Association (CBA) estimates that the annual economic impact of fraud could be as high as $11 billion, or 0.53% of the country’s GDP.
To combat this growing problem, the CBA organized a roundtable of 71 leaders from various sectors in July, culminating in the formation of a new anti-fraud alliance. The group includes public and private sector organizations, law enforcement agencies, and financial institutions, all with the goal of sharing resources and data to better prevent fraud.
Nathalie Bergeron, a spokesperson for the CBA, highlighted the importance of collaboration between banks and telecom companies, which have often operated in isolation when it comes to fighting fraud.
“[The goal is for companies to] share technology and data so that we can better coordinate our efforts,” Bergeron told the Financial Post.
One area of focus for the alliance is expanding successful fraud prevention methods across different sectors. Since much of the fraud originates on digital platforms, the group is also considering strategies to address fraudulent online advertisements and other scams targeting internet users.
While financial institutions are spending billions on cybersecurity, including $120 billion in total by the banks, new types of fraud continue to emerge. Fraudsters are now targeting a broader range of Canadians, with a noticeable shift in 2022.
While seniors were once the primary target, reports from individuals aged 20 to 49 now outnumber those from older age groups. The CAFC's annual report noted that scammers are developing more sophisticated methods to target younger, internet-savvy individuals.
The role of education in fraud prevention is another priority for the new alliance. The CAFC is exploring ways to amplify awareness messages and better inform Canadians about the risks of fraud.
“Fraud operations are developing capacity to target all internet users with creative forms of fraud,” the CAFC’s report stated. “Since younger age demographics are most likely to be engaged online… they become a primary target for internet-based fraud operations.”
Several banks are already taking steps to address the issue. For example, Royal Bank of Canada (RBC) has issued alerts about ongoing scams, such as the "card pick-up scam," which targets seniors. Fraudsters impersonate bank employees and instruct victims to hand over their bank cards, claiming fraudulent activity has been detected. The scammers then use the cards to make unauthorized purchases.
Read more: Canadian bank customers call for better fraud prevention
Another recent scam targeted commercial clients, with fraudsters delivering counterfeit cheques to RBC branches. The scammers then convinced clients to wire the difference between a legitimate transaction and the counterfeit cheque. When the cheque was later discovered to be fake, the victim lost the funds they had wired.
Bergeron hopes that the new anti-fraud alliance will help address these issues by increasing reporting and sharing more data.
“The key message is that we want to better protect Canadians,” she said. “To do that, we need to increase reporting so that we can better detect patterns.”
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