When It’s Too Good To Be True: How to Spot Online Fraud

Sometimes the business opportunities that fall into our laps feel almost too good to be true. In these situations, it’s important to be vigilant if anyone you don’t know if asking you to transfer money online, even if the request seems innocent. It can be easy to fall victim to online banking fraud — just ask Ruth!*

Ruth’s Story

Ruth recently visited our Waterloo branch. Ruth is a local landlord who rents out her basement to university students. With the new buildings that have gone up in recent years, Ruth has found it more difficult to find quality tenants.

Ruth’s luck changed in March when she met Isabella.  

Isabella was an international student from Brazil who responded to Ruth’s apartment listing on Kijiji.

Isabella was a dream come true! Within days of contact, Ruth was sent money through PayPal for first and last month’s rent. She also emailed her a signed rental contract for the two years of her Master’s degree. Isabella told Ruth that she had a storage unit in town where she was holding the furnishings that she used during her undergraduate degree. Isabella sent Ruth an extra $2000 so that she would be able to pay for a moving company to deliver the furniture to Ruth’s apartment.  

The following day, Isabella contacted Ruth and explained that the money that she had budgeted for the moving company was an overestimation and that ABC Movers* only needed $500 for the delivery.  She asked if Ruth would mind sending the remaining $1500 back so that she could use this money to book her flight to Canada. Ruth was more than happy to do so. Isabella requested that Ruth use Western Union to transfer the funds. This was what brought Ruth to our counter.

Just Another Online Scam…

When Ruth explained her situation to us, we knew this was suspicious. We’ve seen scams like this countless times.

The details are always different, but the result is the same: A fraudster overpays for an item, and then quickly needs a partial refund. By the time the original fraud is detected (in this case, the hack of someone’s PayPal account), the refund has long been collected and spent.

The victim in this crime was Ruth, who would end up with no tenant and having lost $1500.  We were able to convince Ruth not to send this transfer to Isabella, but not every client is easily convinced.

We have seen other online banking frauds that follow the same pattern including:

• Selling art online
• Selling a vehicle online
• Selling jewellery online
• Buying or selling a pet online

Any high-value transaction that results in an overpayment should be considered especially suspicious.  If you are hesitant or suspicious of a potential online transaction, please do not hesitate to contact your closest Currency Converters branch.  We’ll help you to determine whether or not you’re vulnerable to theft.

*Names have been changed to protect client identity.