Canadians are now online more than ever. So many of our interactions and purchases now happen on the internet, whether it’s connecting with colleagues through video chat, shopping for groceries or buying clothes. In fact, according to Statistics Canada, retail e-commerce sales reached a record $3.9 billion in May 2020, which is more than double the amount in May 2019.
But despite the convenience and ease of click-and-buy, there’s also a serious downside -- increased security risks. Online scams are on the rise, with criminals trying to snag your log-in information, your credit card number and even sometimes trying to steal your identity.
A big part of financial literacy is knowing how to protect your information online -- because a breach in your cybersecurity can cost you big.
Here’s how to protect yourself from the most common five online scams:
The bank sends you an email saying that they will close your account unless you immediately click on the link and confirm your name, account number and password. The email looks kind of wonky though -- you will notice that the font and colour look off-brand. And when you click to see the sender address it doesn’t look professional -- maybe something like email@example.com, or firstname.lastname@example.org.
That’s what we call a “phishing” scam. Fraudsters are putting a worm on a line and seeing who bites. They’re designing emails that are meant to look like they're from legitimate financial institutions and sending them out on mass. Of course, once you click the link you’re directed to their website where they steal all of your information. They may even log right into your Paypal and transfer out some of your hard-earned money!
Protect yourself by never clicking on a link unless you were expecting the email (like if you just went to your bank site on your own and requested a password reset). If there’s any question whatsoever then call your bank to confirm. Financial institutions and governments will never send an unsolicited email like this asking for your sensitive information.
2. Fake online stores
Another popular online scam is when criminals set up a fake online store to steal your credit card information or even your identity. They will either try to copy a legitimate online retail site or invent their stores and advertise them on Facebook. That’s why you should stick to shopping online from brands you know (and type in the URL correctly) and never click a link in an unsolicited email from a shopping site, or click on a Facebook ad that shouts about the “great deals” they have. It can be hard to tell what’s a fake online store versus a smaller retailer so if you suspect anything is off, simply search on Google for the shopping site. If the site is bogus then red flags should pop up with reports of other users being scammed.
3. Ransomware attacks
Sometimes hackers will trigger pop-up ads or email you advertising amazing shopping deals. These are especially popular right now during the holiday season when consumers are on the hunt for discounts. But once you click your screen will lock and the hacker will demand you pay them to unlock it. Even the X on the corner of the popup ad could trigger the attack, so it's best to disable pop-up ads on your browser, or close the entire window by clicking command C. You don’t want to dip into your emergency fund to pay off a swindler!
4. Unencrypted Data
Make sure you're only shopping on websites that have a URL that begins with https instead of http. That “s” makes a big difference! It means that the site is secure and encrypted, making it much more difficult for hackers to steal your information. Sometimes scammers will specifically create unencrypted websites, as we discussed above, simply to get your information. Sometimes it’s just a small retailer who hasn’t taken the extra step and spent the money for encryption. To minimize the risk always google the brand and exact URL. You can also check out Trustpilot [marketing.trustpilot.com], a free review platform.
5. Open WiFi
It’s best to do shopping over a WiFi network that requires a password to log-in, like the one (hopefully) at your house. While it may feel nice and cozy to sip warm cocoa and do your shopping at a cafe it’s also an easy target for hackers. Open WiFi isn’t encrypted which means anyone who knows what they’re doing can intercept that connection and see all the information you’re giving the retail site, like your credit card, email address and log-in credentials.
Bottom line? Financial literacy isn’t only about saving up for an emergency fund and minimizing debt -- it’s also about protecting yourself online. All your hard work increasing your credit score can be undone in a matter of seconds if a hacker is able to steal your social insurance number (SIN). Similarly, if you don’t comb through your credit card statements each month you can end up paying for purchases you never made. Luckily, with some awareness of cyber crimes and developing a sixth sense about what looks sketchy and what looks legit then you should be able to sidestep most scams pretty easily.