What to do if you’re a victim of e-transfer fraud

**This post may contain affiliate links. I may be compensated if you use them.

Interac e-transfers is one of the most popular ways to send money. Although it’s often referred to as a safe way to transfer funds, it’s not exactly foolproof. There is more than one way where e-transfers can be made fraudulently which is why you need to be careful about how you use your accounts.

Ideally, you want to know the common scams so you can protect yourself, but even the most diligent people can still become compromised. Here’s what to do if you’re a victim of e-transfer fraud.

What is e-transfer fraud?

Generally speaking, there are two types of e-transfer fraud. It can happen when the money deposited into your account is returned to the sender or when your information has been compromised and money is sent out of your account.

That’s right, money sent you via e-transfer can be returned to the sender. This often happens when money was sent to the wrong account by accident or due to fraud. Now you’re probably wondering how that benefits the sender since there would be a paper trail? Well, the scammer is likely sending funds from an account that they have access to, but don’t own. Basically, there are two victims here. You and the account owner that the scammer is sending money from

The key to this scam is automatic deposits. When you have them turned on, the bank could say you were never entitled to that money. However, if you answer the security question correctly, you can say that the money was sent to you intentionally. If the money came from an account that was compromised, it would be returned to the rightful owner.

Now, if someone stole your banking details and sends an e-transfer from your account without you knowing, you do have some recourse. You just need to act on things right away.

Contact your financial institution

The first thing to do if you’re a victim of e-transfer fraud is to contact your financial institution. You’ll want to tell them exactly what happened and why you believe that you’re a victim. There’s not much to say beyond the fact that the e-transfer made was not done by you. Your bank will immediately open up an investigation.

If you don’t contact your bank right away, you could become a victim again the following day. E-transfers have a daily limit of $3,000 (this can vary depending on the bank). If thieves were able to get that money once, they’ll try again the next day. If you haven’t taken any additional steps to protect yourself, you could find yourself out of even more money.

Change your passwords

Changing your passwords should be done immediately, but it’s not that simple. For all you know, it’s your computer that has been compromised with malware. If you change your passwords on a system that’s been infected, you could just be giving your new information to the same thieves.

Switch to a different system and change all of your passwords. You’ll also want to change the answers to any personal questions. Even though it may have just been your banking information that’s been compromised, you’ll want to update any vital passwords including your email and wireless services provider.

If you suspect your computer has malware installed, you’ll need to install anti-malware software. Alternatively, you could do a factory restore on the computer so everything is wiped clean.

Set up fraud alerts with Equifax and Transunion 

Let’s assume that your account was hacked. After you’ve put in a fraud claim and you’ve changed all your passwords, you need to set up fraud alerts Equifax and Transunion. This is important since you have no idea what other information the thieves have. With the right information, they could open up credit cards in your name without you knowing.

Since a credit check is performed with either Equifax and Transunion whenever someone applies for new credit, a fraud alert is a good way of telling if something is happening with your credit score. Basically, if there’s a new credit check, Equifax and Transunion will alert you so you can investigate right away. These fraud alerts come with an annual fee, but it’s worth it since you’re already a victim of fraud.

The reason you need to set up fraud alerts with both Equifax and Transunion is that not every lender reports to both bureaus. For example, Capital One uses Transunion. If you’re subscribed to Equifax and the thieves open up an account under your name with Capital One, you may never know. Paying twice is annoying, but it’s necessary.

Avoid e-transfers for online sales

When sending e-transfers between friends or people you know, it’s perfectly safe. However, since an e-transfer can be reversed, you should never use it to send or receive funds with strangers.

The most common e-transfer scam is when people are selling things online. E.g. a laptop or cellphone. The price is $1,000 and they’re willing to pay right away. Even if the person is willing to meet in person, you should demand cash. Remember, accounts can be hacked, so the buyer could be sending you money from someone’s account who has been compromised. Once that person realizes it, they’ll tell their bank that they’re a victim of fraud and the transaction will eventually be reversed. In the end, you’re left with nothing.

Another obvious e-transfer scam is when the buyer is willing to pay you extra if you ship it. Instead of the asking price of $1,000, they’ll offer you $1,200 if you ship it immediately. If you demand an in-person meetup, they’ll make up any excuse possible to avoid it. Generally speaking, if someone is offering you more money than what you’re asking, it’s likely a scam.

Will I get my e-transfer fraud money back?

If your account was compromised, then there’s a good chance you’ll get your money back. The bank will need to do an investigation, and your account may be frozen for a little while, but you’ll probably get your money back eventually.

Now, if you were the person who accepted the transfer and it gets returned to the sender due to fraud, it’s unlikely you have any recourse. You could file a police report since it’s still technically fraud, but I wouldn’t bet on them doing anything about it. Unfortunately, you’ll probably have to consider it an expensive lesson learned.

What to do if you\'re a victim of e-transfer fraud

About Barry Choi

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. You can find him on Twitter:@barrychoi

1 Comment

  1. Steve on January 24, 2021 at 3:18 AM

    Good advice. I also always ask for cash with doing sales on Kijiji and such

Leave a Comment

Get a FREE copy of Travel Hacking for Lazy People

Subscribe now to get your FREE eBook and learn how to travel in luxury for less