Burnaby residents warned of fee loan scam
Despite the significant spike in online scams, including online shopping and pet-related scams, “advance fee loans” have been the most devastating, taking # 1 among Better’s 10 riskiest scams. Business Bureau for 2020.
“Last year, Canadians lost an average of $ 1,400 per person to this silent killer, which was the highest median dollar loss compared to other scams on the list,” a press release reads. .
Based on the BBB Risk Index (which examines exposure, susceptibility, and monetary loss), early loan scams also had a vulnerability rate of 71%, indicating a worrying increase in risk that ‘a person is victimized if exposed.
“The pandemic has created an environment conducive to financial scams,” said Simone Lis, President and CEO of BBB Serving Mainland BC. “Last year, many Canadians lost their jobs, were put on leave for several months and ran out of money because they didn’t have the financial reserves. As a result, many were forced to apply for emergency loans to pay their bills, often falling into scams. where they paid an upfront fee for a loan that never materializes. “
Locally, BBB received over 46,000 consumer loan inquiries in 2020, making it one of the top 5 services of interest to the public.
“When individuals are trying to find loans, they should keep in mind that charging fees before a loan is illegal in Canada,” Lis said. “If you’re asked to pay a fee up front, or if they offer guaranteed approval without a credit check, go.”
While fake invoices, job scams and cryptocurrency scams maintained a place in the Top 10 list as of 2019, tech support, romance and travel scams were conspicuously absent, the latter being in particular the result of changes caused by the pandemic. Sweepstakes and lottery scams have also made a surprising comeback, with victims sharing that financial strain caused by the pandemic had forced them to believe they had won a much-needed cash prize.
Online shopping scams are still the most common scams with the highest level of exposure resulting in the highest susceptibility rate at 75.4%. The riskiest type of online shopping scam was the pet and pet supply scams. Pet-related online shopping scams resulted in a median loss of $ 750, with 70% of people losing money when targeted.
Lis explained, “Since over 80% of consumers now shop online, there is a greater possibility of exposure to an online shopping scam. In fact, these scams accounted for over a third of all reports. “
Other key findings from the Canada Scam Tracker Risk Report include:
- The percentage of consumers who lost money when exposed to a scam has reached an all-time high, with almost 1 in 2 reports reporting financial loss.
- Canadian males reported a higher susceptibility rate at 48.7% compared to females, and Canadians aged 25 to 34 had the highest susceptibility rate at 54.7%.
- Scams found online and through social media apps were the riskiest type of scam for Canadians.
- While credit cards were the primary form of payment causing loss, scams using online payment systems like PayPal soared to over 31%.
- Amazon identity theft rose sharply in 2020 to take second place among the most imitated companies and brands behind Service Canada. Other brands targeted by the scammers included Apple, Microsoft, PayPal, and Walmart.
This year’s report is based on data provided by consumers to BBB Scam Tracker and uses the BBB Risk Index, a unique algorithm that calculates exposure, susceptibility, and monetary loss to provide a more accurate assessment of risk. scam. Using these three factors, we have a more meaningful picture of the risk of fraud which goes beyond the number of reports received and examines victimization at the individual level, paying more attention to the risk of monetary loss for each person when ‘she is exposed to some scams. Although approximately 1.4 million unique visitors used BBB Scam Tracker and over 46,000 reports were submitted last year, underreporting scams continues to be a tall order.
Using the BBB Risk Index formula, the 10 riskiest scams for 2020:
- Advance loans
- Online purchase
- Home improvement
- Fake invoices and supplier invoices
- Credit card
- Contests and lotteries
- Counterfeit products
To view the full report, visit BBB.org/RiskReport.