Majority of Canadians alter payment habits due to fraud concerns - 13 per cent affected by payment fraud in the past six months

More than one in five Canadians (22 per cent) risk missing bill payments due to concern of scams, reveals new Payments Canada study

Key study findings:

• Unauthorized transactions (38 per cent) and impersonator contact (34 per cent) are the most frequent types of payment fraud.
• 32 per cent of Canadians struggle with knowing what payment-related communications they receive are legitimate.
• Among Canadians who experienced payment fraud over the last six months, 59 per cent involved money loss.
• Many Canadians fail to use password best practices, 35 per cent store passwords in their smartphone, computer, email or notebook, and 19 per cent use the same password for all their accounts.

OTTAWA, ON, July 29, 2024 /CNW/ - More than one in 10 Canadians have experienced payment fraud in the past six months, indicating similar year-over-year patterns (13 per cent in 2024 compared to 14 per cent in 2023), according to a new study from Payments Canada. For many Canadians, concern around fraud and cyber risk impacts their payment behaviours and creates hesitation around paying bills out of concern if they are legitimate or a potential scam.

Fraud and cyber security concerns influence Canadians' payment behaviour: The prevalence of fraud and cyber incidents impact the payment preferences and behaviours for more than half of Canadians (54 per cent), including who, how and where they choose to transact. Almost one in three Canadians (32 per cent) struggle with knowing what payment-related communications they receive by telephone or email are legitimate versus a potential scam. More than one in five Canadians (22 per cent) feel they are at risk of missing their bill payments because they avoid responding to payment-related communications due to concerns that they could be potential scams.

Unauthorized transactions, impersonators and credit card fraud are the top three types of fraud: The top types of payment fraud experienced by Canadians are: 1) Unauthorized transactions appearing on a bank or credit card statement (38 per cent); 2) Impersonator contact, meaning someone contacting them via email, telephone, SMS text or social media and pretending to be someone else (34 per cent); and 3) Stolen credit card information resulting in an unauthorized purchase (18 per cent).

Young Canadians are more likely to experience and fall victim to authorized push payment fraud: Young Canadians (18-34) were significantly more likely than middle-aged (35-54) and older Canadians (over 55) to have recently experienced authorized push payment fraud (29 per cent versus two per cent and six per cent respectively). Authorized push payment fraud refers to situations in which criminals manipulate their victims into making payments or sharing personal details under false pretences. Often, fraudsters pose as a well-known, legitimate business or government body to win a victim's trust. These scams are called 'authorized' because they depend on the victim to transfer money voluntarily. Since young Canadians are more likely to send/receive money to/from a friend or family member using social media platforms (like Instagram, WhatsApp and Messenger) and regularly use other electronic payment methods besides credit cards and prepaid cards, as compared to other age groups, their overall risk exposure for push payment fraud is higher.

Among Canadians who fell victim to fraud, 59 per cent involved money loss: Of respondents who experienced payment fraud in the last six months, incidents involving money loss were $500 or less (46 per cent), while 13 per cent were over $500 and 37 per cent resulted in no money taken in the fraud incident but did result in stolen personal financial data. The majority (85 per cent) of those who experienced payment fraud involving money loss in the past six months reported it to their financial institution.

Older Canadians were most likely to report no money being taken but personal and/or financial data was: Of those who experienced payment fraud in the last six months, older Canadians (55+) were significantly more likely than young Canadians (18-34) to report no money being taken but personal/financial data was (nine per cent vs. 24 percent respectively). Young Canadians were significantly more likely than older Canadians to report money being taken (74 per cent vs. 50 percent respectively).

Canadians limit information sharing and leverage two-step authentication to help protect against fraud: Most Canadians from the survey (79 per cent) limit the amount of personal information they share online and only provide it when required. Further, 70 per cent of Canadians only shop with trusted sites when buying online. When buying or selling items online on peer-to-peer marketplaces (for example, Kijiji, Craigslist), 51 per cent of Canadians stick to local and in-person transactions and 38 per cent use secure payment services like Interac e-Transfer or PayPal. The number of Canadians who enable two-step authentication for accessing their accounts increased year-over-year (65 per cent in 2024 from 50 per cent in 2021).

Weak password protection management creates fraud risks for Canadians: Despite the steps Canadians are taking, there is still room for improvement. The proportion of Canadians saying they store their passwords on their smartphone, computer/laptop, or in an email or paper notebook increased to 35 per cent in 2024 from 31 per cent in 2021. Another 19 per cent of Canadians tend to use the same password for all their accounts.

Young Canadians are significantly more likely than other age groups to store their passwords on their smartphone, personal computer, in an email or a notebook (41 per cent) and use the same password for all their accounts (28 per cent). Over one in 10 young Canadians (12 per cent) have even given out their personal and banking details via email or text message.

About the study: 1,500 Canadians were interviewed online between February 26-March 8, 2024, using Leger's online panel. The margin of error for this study was +/ 2.5 per cent, 19 times out of 20.

About Payments Canada: Payments Canada makes payments easier, smarter and safer for people living in Canada by providing secure and resilient infrastructure where payments are cleared and settled between financial institutions. We are a public purpose organization that owns and operates Canada's payment systems, Lynx and the Automated Clearing Settlement System (ACSS) and are responsible for the bylaws, rules, and standards that support these systems. In 2023, our systems cleared and settled over $112 trillion — more than $450 billion every business day. Some of the transactions that pass through our systems include debit card payments, pre-authorized debits, direct deposits, bill payments, wire payments and cheques. Payments are an essential part of our economy and way of life. From a down payment on a home, an invoice paid to a local business, money sent to a family member abroad, or a first paycheque﹘payments keep Canadians and the economy moving forward.

For media inquiries, please visit Payments Canada's media centre.

SOURCE Payments Canada