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The biggest CRA-related scams to watch for this tax season

Victims often realize immediately after they've been tricked that they've fallen for a scam

Ottawa, Ontario, Canada - November 18, 2020: A sign for the National Headquarters of the Canada Revenue Agency (CRA) outside the Connaught Building in Ottawa.
The CRA says any texts or messages asking Canadians to click a link are likely scams. (Colin Temple via Getty Images)

While Canadians are preparing their tax returns, fraudsters are preparing their newest batch of scam messages, particularly those pretending to be from the Canada Revenue Agency (CRA).

Scammers are also getting more sophisticated and utilizing all forms of communication to bombard Canadians, making it overwhelming and confusing to decipher the authentic CRA messages from the fakes.

"We see it every year where fraudsters will send out phishing text messages and email campaigns, claiming that their income tax has been reviewed and they're eligible for a payment," Jeff Horncastle, acting client and communications outreach officer with the Canadian Anti-Fraud Centre, told Yahoo Finance Canada in a phone interview.

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Fraudsters know how to time the scams according to various government benefits and payouts, he adds.

"If there's a payment being sent out in January and April, then you could probably bet you're going to get a phishing email or text message saying you have to click on this link to accept the funds," he said.

From what we're seeing with phishing, victims realize right after they click on a link and provide personal information that they've done something wrongJeff Horncastle, Canadian Anti-Fraud Centre

Phishing is where fraudsters deceive the victim into revealing personal information and it's one of the biggest forms of CRA scams circulating.

Phishing emails claiming to be from the CRA nearly doubled to 1,360 last year, from 731 in 2021, according to the Canadian Anti-Fraud Centre.

However, the top method of communication used by scammers is still direct phone calls, Horncastle says, followed by email, social media messages and text messages.

These are the biggest CRA scams to watch out for:

  • Text messages that contain personal information with a link claiming to be from the CRA

  • Phone calls from scammers pretending to be the CRA or RCMP requesting cryptocurrency payments in order to cancel an arrest warrant

  • Emails or text messages offering a GST/HST tax refund with a link to a form that needs to be filled out immediately

  • Text messages stating there's an error with your CRA account

  • Messages offering tax refunds that require personal information such as a SIN, date of birth or banking details to be revealed

  • Identity theft where fraudsters file fake tax returns. You might receive notifications that changes have been made to your CRA account or have difficulty filing your legitimate tax return

  • Scammers spoofing (masking their phone number or caller ID) using local numbers or law enforcement numbers demanding payments

How to avoid falling victim

The CRA will never ask for personal information via email or text messages or send links to click on. These are likely phishing messages, the agency says.

However, the one exception is if you personally call the CRA asking them to send a form or link to information, the CRA agent will send it to you while you're on the phone with them.

The CRA will never request to be paid in prepaid credit cards or gift cards, cryptocurrency or via e-transfer. It will also not resort to threats of arrest, aggressive language or leave personal information/threats on an answering machine.

"As scammers adapt their practices, so does the Canada Revenue Agency. The government has robust systems and tools in place to monitor, detect and investigate potential threats, and to neutralize threats when they occur," the agency said in a statement to Yahoo Finance Canada.

To create more awareness, the CRA launched a new alert page informing Canadians of the latest scams.

One of the best ways to avoid falling victim is to ensure your MyAccount is set up on the official website and add multi-factor authentication. MyAccount is one of the main ways the CRA communicates with taxpayers and it's the most secure way to access electronic messages from the agency.

What to do if you've fallen for a CRA scam

"For the most part, victimization happens very quickly. Whether a person is just waking up or might have something else going on, for the most part from what we're seeing with phishing, is victims realize right after they click on a link and provide personal information that they've done something wrong," Horncastle said.

He suggests taking time to analyze the message and inspect aspects like the email address, phone number or web address to determine if it's real or not. Canadians can call the CRA to verify a message if they're unsure whether it's authentic.

Scams can be reported to local police and to the Canadian Anti-Fraud Centre. If a social insurance number has been stolen, Service Canada should be informed.

Canadians should call the CRA if any personal account information has been changed, benefits have been applied for without consent, or to disable online access to CRA sign-in services.

Horncastle says fraud prevention has to be a team effort.

"If you feel that you're protected, try to share the knowledge you have with other people you think are maybe more at risk," he said.

"We do a lot of fraud prevention messaging, but we can't do it alone. We need people to share that messaging with their family members and loved ones."

Michelle Zadikian is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @m_zadikian.

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