Scams and scammers have been around as long as there was money to be made and innocent people trusting enough to believe them.
They have never been more prevalent with the rise of technology, social media and the increased global connectivity of the internet.
As an accountant, my clients often ask about two very similar scams that involve fraudulent Canada Revenue Agency scammers:
The CRA collections officer call
The first and most common fraud I see involves impatient scammers acting as CRA collections officers.
They call to advise you about an unpaid tax balance (unbeknownst to you), typically between $300 and $800. They create a sense of urgency, indicating that they have tried to contact you in the past so you need to pay immediately.
If you don’t, the scammers threaten various actions, such as an RCMP officer being sent over to your home, locking down of personal bank accounts and telling your employer.
“Lucky for you,” though, the scammers advise that the balance can be settled with a credit card number over the phone.
CRA refund email
The second most common fraud I see involves an email supposedly from the CRA advising that you are owed a refund of tax from a previous year reassessment.
The email appears to be official and often includes CRA letterhead, various reference numbers and your name. This phishing scam then requires you to click a link and enter all your personal information, including social insurance number, credit card number and expiry, mother’s maiden name and birth date. Once entered, they advise you that the refund has been sent.
These scams continue to be perpetrated for one reason: they work. Most people inherently do not like to be contacted by the CRA, especially when they are advised they owe money.
Compound that with an aggressive collection narrative of a balance owing or the good news of a refund (common with a small reassessment), and you can see why some people fall for the scams.
Here are some tips to ensure you are not a victim of these CRA scams:
- Be skeptical: Although it may be difficult to tell the difference, do not be fooled by official looking letterhead or emails. The CRA will never send you a direct email advising of a balance owing or balance refundable, asking for personal information or requesting your credit card information. To receive emails from the CRA, you must register for its “My Account” service. After registering, all CRA email correspondence sent to you will simply state that a new message resides within your “My Account” inbox and to log in to read it.
- Do not act immediately: Scammers will do all they can to obtain your personal information at that moment, but do not give it to them. Instead, state that you are going to first contact your accountant or adviser.
- Involve your accountant or trusted adviser: A quick phone call to them can easily determine your account status with the CRA by asking them to follow up. Often your accountant has seen this scam before and can advise you right away if this is a scam.
- If you have been scammed, report it: As mentioned, these scams work, so do not be em-barrassed if you have fallen victim. Instead, report it immediately to the Canadian Anti-Fraud Centre.
Joe Renooy, CPA, CA, is an agriculture and business adviser in MNP’s Grande Prairie, Alta., office. Contact him at 780-831-1700 or email@example.com.