In January of this year, Julian R. Mitchell, 20, tried to use a debit card from a wallet that he had allegedly stolen. He was in a Nashville bar at the time, and the computer system alerted staff that the debit card was lost or stolen. They asked to see his identification, so he pulled out the driver’s licence from the wallet. The problem? Mr. Mitchell, who looks rather odd with blond hair, a red beard and black eyebrows, looked nothing like the picture on the driver’s licence and his height didn’t match, either.
The moral of the story? If you’re going to steal someone’s identity and use their photo ID, make sure you don’t look like a Ken doll from the Barbie collection. The truth is, identity theft is more common today than ever. One of my close family members had her life turned upside down for six months trying to combat the theft of her identity.
The taxman recognizes the problem, and so the Canada Revenue Agency (CRA) has published a guide on how to protect yourself (Publication RC284 available at canada.ca/revenue-agency). Here’s a primer on the topic.
If someone steals confidential information from you, the thief may use it for many unscrupulous deeds, including: opening bank accounts in your name; applying for loans, mortgages or credit cards; obtaining GST/HST rebates or refunds, or benefits and credit payments; filing for income tax refunds; making purchases (online is common) using your credit or debit cards; making fraudulent withdrawals; changing your address to redirect mail; ordering a new passport; misusing your social insurance number (SIN) or driver’s licence number; or creating a criminal record. Sounds pretty nasty, doesn’t it?
The most common information that a thief will attempt to steal includes your name, SIN, birth date, address, passwords, credit card numbers and bank account information. How does a thief get this information? It can be as simple as a stolen wallet or a lost smartphone. Home burglary is another approach, but increasingly, the information is stolen electronically through phishing (the use of official looking e-mails to direct you to a fake website that looks identical to a legitimate business, financial institution, government department or agency, or a login page for a common online service). Other online approaches to stealing your information involve unsafe internet connections (public Wi-Fi is a culprit).
There have been many scams where thieves pose as the CRA and use e-mail or texting to request personal information. CRA has said that it will never ask you to provide personal information by internet, e-mail or text. Some thieves attempt to siphon money from you – and the taxman – by posing as fake charities and soliciting donations. You should always check the registration status of a charity that you’re not sure about by going to canada.ca/charities-giving to get more information about the charity.
Another common scam involves thieves asking for taxes or fees to be paid to the CRA on lottery or sweepstakes winnings. CRA will never ask for these types of payments (they’re generally not taxable in Canada). Or, perhaps, you’ve received a threatening phone call from someone claiming to be from the CRA who suggests that you’ve cheated on your taxes and are about to face prosecution. You’re then asked to provide personal information to the caller. Another scam.
How can you avoid these problems? Check your credit score regularly (go to equifax.ca or transunion.ca). Protect your SIN, don’t use it as identification, and don’t provide it to anyone unless you’re legally required to do so. Also, pay attention to your regular bills and inquire about any missing account statements or suspicious transactions, and always report a lost or stolen credit or debit card. Carry only the ID you need, and don’t write down your passwords or carry them with you. If you’re travelling out of town, have a neighbour pick up your mail and hold it for you. As for your computer, install good internet security software.
The taxman suggests registering for MyAccount on CRA’s website (canada.ca/my-cra-account) and check your personal information regularly to ensure it’s current and valid.
If you think that you’re a victim of identify theft, be sure to notify your financial institution and the local police. Also, contact the CRA at 1-800-959-8281 in addition to reporting the theft to a credit reporting agency (i.e. Equifax or TransUnion). Make sure you keep records of recent purchases, payments and financial transactions, and call 1-800-O-Canada for information on where and how to replace identity cards (a health card, driver’s licence, and even your SIN if necessary). To report a fraudulent communication or scam, contact the Canadian Anti-Fraud Centre by e-mail at email@example.com, or call 1-888-495-8501.
Tim Cestnick, FCPA, FCA, CPA(IL), CFP, TEP, is an author, and co-founder and CEO of Our Family Office Inc. He can be reached at firstname.lastname@example.org.