4 CRA-related scams to stay vigilant about this tax season

Technology has been a boon for tax scammers pretending to represent Canada Revenue Agency (CRA), providing them with the ability to potentially reach millions of taxpayers who they will try to scare and threaten into giving away their money and personal data.

“We are all at risk of being scammed,” says Charles Drouin, a spokesperson for CRA. “We are trying to get people to be smart. What’s most important is to be vigilant.”

When most people get contacted from someone saying it is the CRA, their initial tendency is to think that it’s legitimate, says Carolyn Goodwin, CPA, senior manager of operations at CPA Canada. “We don’t have a healthy sense of skepticism. Scammers know that, and they’re getting away with scamming more and more Canadians,” she says.

Here are some common scams that taxpayers need to be aware of in the current tax season.

1) Fake offering of Canada Carbon Rebate

The Canada Carbon Rebate is new in 2024, rebranded from the Climate Action Incentive payment. Scammers might take advantage by trying to entice people to get that rebate by clicking on a link in an e-mail or text message, says Drouin.

“We at the CRA will never ask you to click on a link,” he explains. “The only thing you may get, for example, in terms of a text message will be a two-step verification on MyAccount, or online services, to enter a code to get access to your account.”

When users click for a refund, that sends them down a “rabbit hole of communications” with the potential scammer, says Goodwin. In order to release the refund, scammers are creating all kinds of schemes where they ask for money, “and then of course, you never see your money again,” she warns.

2) False warning of compromised accounts

Another scam is to receive a text message, e-mail or even a phone call saying, in effect, “your account has been compromised.”

“It could be the case your account can get compromised. But we will never call you up in that manner asking for personal information to get access to your account,” says Drouin.

A common tactic of scammers is to put pressure on victims by stating there is an urgency to act, often accompanied by threatening language. “They might use words like ‘we’ll refer this to the authorities, to police. You might go to prison,’” says Drouin.

“If you hear any of that it’s not true,” he explains. “If we call you at home, our agents are very professional and will never ask you to provide very specific information.”

When a legitimate incoming call is made to a taxpayer from a CRA agent, it is perfectly acceptable for the recipient of the call, if not 100 per cent certain of the source, to ask the agent to provide their name, and agent number, then hang up and go to the CRA website to find the legitimate number, says Drouin.

They can then call the CRA directly and say something like “I got a call from someone claiming to be from CRA. This was his or her name. This was the agent number. I’m trying to verify this was a true call before I provide any information.”

3) Use of artificial intelligence to mimic CRA news

Another trend in the past year involves the use of artificial intelligence to impersonate real newscasters in an effort to fool taxpayers into thinking the information they are being provided is legitimate.

For example, AI will alter the broadcast by using the newscasters’ voices to provide false information about a non-existent rebate for Canadians, and tell taxpayers that if they want it, they need to click on a link, which then takes them directly to a scammer’s website, explains Drouin.

One danger in 2024 is that such scammers will say a grocery rebate is being offered, but that was only available in 2023, says Drouin.

CRA is locating these fake news websites and warning people about them through its social media account, and also doing everything they can to shut them down, Drouin adds.

4) Fake audit warning letters

Fake audit letters by scammers claiming they are from CRA are also being used to frighten some taxpayers into believing they are being audited.

“We’ve seen in the last year fake letters that look exactly like they are from the CRA. It’s very hard, in some cases, to identify some of these that are not right,” says Drouin, warning that victims should never call the number in the letter, but rather look up the CRA’s website and call that number.

Even if an incoming phone call identifies the CRA through caller ID, it might not be. “It’s very easy for scammers to change these,” explains Drouin.

Who is most at risk?

While everyone needs to be vigilant against such scams, some groups of people might be more at risk than others.

This includes newcomers to Canada, who are just learning about the tax system, and seniors, who are often not as familiar as younger Canadians about new technologies and electronic devices, and could therefore be more prone to click on a dangerous link in an e-mail or text, says Drouin.

Young Canadians, as first-time taxpayers, might also be at risk because of a lack of experience, says Goodwin.

What to do if you’re a victim of fraud

If somebody knows they have been scammed, the first step is to always report that to police, says Drouin. “Some people will feel ashamed that they fell for a scam. Don’t. Thousands of people every year get scammed so call your local police authority,” he stresses.

If a taxpayer knows that their social insurance number has been compromised, they need to contact Service Canada. If their CRA account, such as MyAccount, has been compromised, they need to call CRA, says Drouin.

The Canadian Anti-Fraud Centre should also be contacted by people who have been victimized, says Goodwin.

“We estimate that only five to ten per cent of victims report to the Canadian Anti-Fraud Centre,” says Jeff Horncastle, a spokesperson for the Canadian Anti-Fraud Centre and Royal Canadian Mounted Police.

“It’s so important to understand what our mandate is and what the value is in reporting. We collect the information and we share that for prevention initiatives and alerts to educate Canadians on anything new we’re seeing. We’re able to link information across the country,” he explains.

“We also provide information to law enforcement and governments in Canada and around the world to disrupt crime,” Horncastle adds.

IDENTIFYING SCAMS AND SWINDLES

Read about some of the cons and frauds we expect to see more of in 2024, and learn how to avoid them. Understand fraud and how to protect yourself from becoming a victim by requesting a financial literary session on fraud protection. Plus, subscribe to the Mastering Money podcast and learn about other scams.

Photo caption: Seniors, who are often not as familiar with new technologies and electronic devices, could be more prone to scams (Getty Images)