The Rise In Sophisticated Scams And How They’re Causing Debt Problems

Below are some of the most common and most financially harmful scams that we are seeing today:

CRA Impersonation Scams

Canada Revenue Agency (CRA) related scams are one of the most widespread forms of fraud in Canada. Scammers use false phone numbers, fake websites, and AI generated messages to convince people that they owe taxes or that their accounts have been compromised.

The CRA has issued warnings about scammers using generative AI to create fake messages, emails, and even voice calls to sound like real agents. This includes the use of fake CRA notices with realstic branding.

These scams can be particularly dangerous because they go beyond traditional “red flags” that people rely on to spot fraud.

The CRA warns that scammers will often use intimidation tactics, including threats of arrest or asset seizure, in order to pressure victims to pay immediately. These scams are effective as they exploit the victim’s fear, especially for people who are already financially stressed.

Romance Scams

Romance scams have become one of the costliest forms of fraud in Canada. The Canadian Bankers Association reports that Canadians lost over $58 million to romance scams in 2024. We can confirm this is an issue in Alberta, as we have spoken with a significant number of people over the past couple of years who have been impacted by these scams.

These scams typically involve:

• Meeting someone online through a dating site or social media
• Months of emotional “grooming”
• A sudden crisis or emergency requiring money
• Requests for secrecy or urgency

Romance scams are rising and often target those who are emotionally vulnerable or isolated. Seniors are particularly at risk, given their tendency to be socially isolated, with some reports showing that they are 33% more likely to lose money in a scam compared to other age groups.

These scams can lead to significant debt when victims borrow money, especially through high interest lenders, when trying to help someone they believe they are in a relationship with.

Investment & Crypto Scams

These scams are becoming more sophisticated, capturing even highly experienced investors in their web.The Canadian Anti-Fraud Centre warns that scammers are increasingly using long‑term online communication to build trust before convincing victims to invest in fraudulent crypto schemes. We have spoken with several people who, despite a high level of financial experience, have fallen victim to these scams, as they involve sleek websites and the generation of sophisticated reports that make it appear legitimate.

These scams often promise:

• High returns
• “Guaranteed” profits
• Insider opportunities
• Personalized investment coaching.

After the money is invested, the scammers often produce reports showing large gains in the value of the victim’s crypto. These reports are then used to try to entice the victim to invest even more money or pay “fees” to extract the gains. Victims typically lose all of the money they invested, plus debt incurred taking steps to try to recover the funds.

Scams don’t just cause immediate financial loss; they often trigger a chain reaction that leads to deeper financial trouble. We regularly meet with individuals who:

• Borrowed money to pay the scammers
• Incurred legal or other professional fees trying to recover their funds
• Fell behind on bills due to unauthorized withdrawals leaving their bank accounts empty
• Took out high‑interest loans or used credit cards to manage day-to-day expenses after losing all of their savings to a scam, often while still believing that the situation is temporary
• Became overwhelmed by multiple debts after trying to “fix” the situation

In many cases, shame or embarrassment delays people from seeking help, which often creates more problems. During this time, victims are often subjected to a second round of scams, where new individuals pose as agents trying to help them recover the funds for a fee. And their financial stress causes them to become increasingly desperate, leaving them vulnerable to further attacks from the same or other scammers.

Overall, scams are becoming much more sophisticated, and the financial consequences can be significant. But falling victim to a scam is not a sign of carelessness or foolishness. These schemes are often carefully planned and implemented with a high degree of skill, and they have been designed to manipulate emotions and create urgency. One wonders what the scammers would be capable of if they used their skills and motivations for legitimate business.

If you’ve been impacted by a scam, here are steps that can help:

• Contact your bank immediately to report unauthorized transactions
• Change passwords and enable two‑factor authentication
• Report the scam to the Canadian Anti‑Fraud Centre
• Avoid responding to any unsolicited offers to “help”
• Talk to a trusted friend or family member who can help you gain perspective and access legitimate assistance
• Avoid taking on debt to recover losses
• Speak with a Licensed Insolvency Trustee if the financial fallout has become unmanageable. Debts resulting from scams, including credit cards, loans, and lines of credit can generally be included in a consumer proposal or bankruptcy

If a scam has contributed to your financial stress, you’re not alone. And there are options to take control of your situation and move forward. A Licensed Insolvency Trustee can help you understand your options and assist you in executing a plan to regain control. 

Charla Smith & Company is a Calgary-based Licensed Insolvency Trustee, serving the Alberta region. We regularly help individuals consider their options when they are facing overwhelming debt incurred as a result of being victimized by scammers. If you'd like to explore the options, please reach out to us.

Disclaimer: This publication provides general information and should be seen as broad guidance only. The information contained herein cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon this information without obtaining specific professional advice relating to your particular circumstances. Charla Smith & Company Ltd. does not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.