Top 5 scams targeting newcomers

5 top scams for newcomers to avoid

/ All, Newcomers / By

New immigrants to Canada are particularly vulnerable to scams. Since you are new to the country and mostly unfamiliar with the systems and processes, there is a sharp learning curve. The Financial Consumer Agency of Canada warns all Canadians to be cautious of emails, text messages or calls that ask for personal or financial information. We review the top 5 scams targeting newcomers to Canada and show how to avoid them.

1. Housing /rental scams

One of the top 5 scams targeting newcomers are housing scams. I often encourage newcomers to Canada to avoid securing rentals or housing from overseas unless provided by an organization or acquired by someone in Canada. Searching for accommodation is one of the top 11 mistakes many newcomers to Canada make. Rental and housing scams are rampant and are easy to fall for when you are not in the country. Craigslist, Kijiji and  rentboard.ca are some of the most popular resources to find housing in Canada. 

Low offers for luxury housing

Fraudsters will use pictures of luxury properties with low rent to attract people. They will pose as the landlord who lives abroad and is desperate to find tenants. They immediately start asking for money upfront. Some will request the security deposit and first and second months rent in exchange for a discount or lower rent for the rest of the year. 

 

Warning signs are when you’re asked to transfer money without an official rental contract. Google the address to make sure it is legitimate and not a duplicate listing. Always ask to visit the property in person and get the landlord or property manager’s full name, phone number and address. Request for the rental agreement and thoroughly examine it. Check your province’s ministry of housing and rental agreements templates to ensure they comply with the Residential Tenancy Act. 

 

Fraudulent Credit report or background check

Scammers will start by telling you a story of being duped being past tenants. So they require an extensive credit report or background check before moving forward. Scammers ask you to fill out a document or send a link to a website to get your credit report. These forms and websites are designed to steal your credit card information. The information they request is extensive. 

 

Fake rental properties

There are properties or listings that landlords or property managers have no association with. For the immigrants overseas, you are an easy target as these scammers know you are not around to verify the existence of the property. In some rare cases, they can show you the property in person. However, when you arrive for the move-in date, the fraudster will not show up with the keys. Some scammers can show abandoned or foreclosed properties that they are not authorized to rent. 

 

How to avoid these scams:

  • Once you find a rental property that you are interested in, start your research to verify its legitimacy.  
  • Before completing any forms, it is essential to verify the potential landlord’s identity or property agent.
  • Search on google for the address, the landlord or property manager/organization. Remember to check for google and landlord reviews. 
  • Know your rights as a tenant. There are sites such as reviewmylandlord.com, Canada Mortgage Housing Corporation and Equifax and Tenant Verification service that offer more information. 

Know the warning signs for rental frauds and scams:

  • The monthly rent is lower than the market rate.
  • You are asked for money upfront before a formal rental agreement.
  • Requests to wire money outside the country
  • Offered a rental unit without a background or credit check
  • Rental listings without pictures of inside the property.

2. Job offer scams

Another common scam targeting newcomers are job offer scams. Most newcomers to Canada arrive without job offers and a finite amount of money to cover living expenses for themselves and their families. As the weeks become months, you can become desperate for a job opportunity. Scammers target newcomers for this reason, and there are types of predatory job opportunities to be aware of.

Job training

You will receive a message via LinkedIn or in your email, offering you a job once you pay for the training fee. The company continues to add various training and resources that they need you to pay for before earning a paycheck. Eventually, the company will say you failed the pre-qualification and cannot be hired after taking various amounts of money from you. 

Work from home

Before the pandemic, these kinds of job opportunities were extremely lucrative. Working remotely offers many benefits to newcomers who are under financial pressure. There are still many ads that pop up online, saying you can make $5000 a week from working from home with this or that company. The testimonials by various people are compelling. Some organizations will offer to pay you large sums of money upfront for you to purchase large quantities of products to sell to on the market and ask for your SIN, bank details and other financial information to send you the money. These job offers come so quickly because they are mostly a scam. 

How to avoid

  • Be careful of job offers or requests for interviews that come without you ever having applied for them. If it is too good to be true, it probably is.
  • Looking for a job is hard work. Applying online, writing cover letters and being interviewed are all critical steps of a process. The process helps both you and the company verify that you are credible and legitimate. There is no genuine job worth having that offers to hire you and pay you right away without due process. Most legitimate companies will pay you two weeks after your start date and collect your financial information after you have signed written contracts that protect you and the employer. See our post on nine effective ways to accelerate your job search as a newcomer. 

3. Identity theft scams

Phishing 

Most of the top scams targeting newcomers aim to steal aspects of their identity. Fraudsters send emails or online ads to get you to give personal, financial information or passwords through various means. Some of these emails include:

      • Announcing a solution to remove a fake computer virus.
      • Naming you the winner of a phony prize or contest you never entered.
      • Convincing you to invest money. 
      • Requesting donation for a fake cause.

Many of these phishing scams can come in the form of emails, calls or texts. Some text messages may ask you to reply NO or STOP to receiving them and make sure you DO NOT Reply and immediately delete the text. Forward the texts to 7726 (SPAM on most keypads). This helps you block future texts from those numbers.

Government impersonation

You may receive suspicious emails, calls or text messages from people posing as government officials. Fraudsters often use the CRA, IRCC and other government agencies. 

    • The IRCC will never:
      •  contact you over the phone to request fees or fines;
      •  Aggressively threaten to arrest or deport you; 
      • Ask for personal or financial information over the phone;
      • Ask for fees to be paid via prepaid credit cards, Western Union, MoneyGram and other services.  

Call the IRCC call center or call the Canada Revenue Agency at 1-800-959-8281 to confirm if the call is real. If the request wasn’t authentic, report it to the Canadian Anti-Fraud Centre. Many people will not take the time to report scams unless they have had real consequences. Get in the habit of reporting scams to the authorities. This will prevent fraud from lasting for weeks without being called out to the public. 

Debit/Credit card fraud

Fraudsters are everywhere. I don’t say this to scare you, but be careful of the people standing behind you in the grocery line at the ATM and various sale points. People watch as you key in your Personal Identification Number(PIN) and steal your card later. There are card skimmers that copy information from your card. There are also massive data breaches that can occur at online companies to take your card information.

How to avoid:

  • Banks continue to offer clients many ways to stay on top of fraudulent charges on their credit or debit cards. 
  • Be careful when you use your card at the point of sale and use your hand to cover it whenever you’re entering your PIN. 
  • Avoid disclosing your card information over the phone or online to suspicious or unverified people. 
  • Chip cards are more secure than magnetic stripe cards. 
  • Choose a PIN that is difficult to guess and keep it a secret. 
  • Stay informed on how to avoid debit/credit card fraud. 

4. Pyramid schemes

The fourth most common scam targeting newcomers are pyramid schemes. Pyramid schemes, also known as pyramid selling, are among the most common traps for newcomers to Canada. It is an illegal multi-level marketing plan with conditions for participants, which is usually compensation for recruitment. Once your ability to make money is solely dependent on you recruiting other people, you should be wary of such setups. 

 

Pyramid schemes are often confused with multi-level marketing. Multi-level marketing (MLM) plans are legitimate and legal product distribution plans required to publish earnings, time and effort required by participants. 

 

According to Section 55.1 of the Competition Act: “Multi-level marketing plan that includes either compensation for recruitment, mandatory purchases of product to participate, inventory loading or lack a buyback guarantee on reasonable commercial terms, constitutes a prohibited scheme of pyramid selling’.” 

 

MLM Recruiting

There is a fine line between pyramid schemes and multi-level marketing plans that you should know. Multi-level marketing organizations can have a lot of promise if you get in early and have a broad base of people to recruit to keep generating sales. There are a few success stories that get repeated to reel you in. 

 

Research has shown that the majority of people fail in Multi-Level Marketing. The AARP Foundation’s study found that 44% drop out after less than one year. 90% leave within five years, and after ten years, only those who are at the top remain. 95% of people drop out of MLMs within ten years. 

In comparison to failure rates of small businesses, the failure rates of MLMs are outstanding. 20% of small businesses fail in the first year.

How to Avoid:

Before joining an MLM, be sure to get recent case studies and statistics of success stories. There are very few success stories and many failures here. In Canada, there are about 1.3 million people in MLMs. MLMs target women, young moms and new immigrants as they are the perfect recruits. Many MLMs sell the idea of success and show flashy cars and large houses but are mostly in a significant amount of debt. The odds of you being successful in an MLM are less than 10%. As a new immigrant, you are better off finding a stable job or starting your own business. Prioritize establishing a sense of security before venturing into risky ventures such as MLMs.

5. COVID-19 fraud

The final top scam targeting newcomers is a recent phenomenon. COVID-19 has upended the world as we know it and will change the world for many years. Even after a vaccine is ready, the economic and social effects of the pandemic will be long-lasting. The pandemic has affected new and aspiring immigrants to Canada in various ways. Fraudsters will take advantage of any opportunity to make money, and COVID-19 has provided them with many. 

The Canadian Anti-Fraud Centre warns Canadian residents to be aware of:

  • Third-party companies are offering to assist in filling out applications for financial assistance such as CERB.
  • Fraudsters are stealing identities to apply for CERB benefits.
  • Calls, emails and text requesting personal information for government or healthcare research
  • People are impersonating charitable organizations seeking donations for victims, products or research.
  • High priced or low-quality health or sanitization products and offers online promising: cleaning products, hand sanitizers, miracle cures, natural remedies, vaccinations or faster testing.

How to avoid these scams:

  • Avoid answering calls from unknown numbers. Feel free to let it go to voicemail and listen to your messages later.
  • Never respond to or click suspicious links or attachments in emails.
  • Never give out your personal or financial information.
  • Verify that a charity is registered.
  • Avoid purchasing or signing up for unverified products or services.

To stay updated on COVID19, visit the Government of Canada COVID-19 resources.

Resources to note:

  • Contact the Canadian Anti-Fraud Centre.
  • Visit Equifax or TransUnion to monitor your credit regularly.

These top scams that target new immigrants have led to significant financial loss for new immigrants. Arm yourself with knowledge and report any suspicious encounter you experience to the right authorities. Another way to stay informed of the latest scams faced by new immigrants is to build a strong community of immigrants.