Originally published by Financial and Consumer Services Commission of New Brunswick. Republished with permission.
Financial stress can have a big impact on your health, both mentally and physically. Unlike a physical injury, these effects are not easily seen or measured. A national survey conducted by Leger, on behalf of Financial Planning Standards Council (FPSC), reported that 42% of Canadians listed money as their greatest stress. Fifty-one percent of women reported that they are losing sleep and 30% of women said they have anxiety due to financial stress. Upper and lower back pain and digestive problems are also common when dealing with high levels of stress. A national survey by the Canadian Securities Administrators (CSA) reported that 36% of all fraud victims have experienced stress as a result of being victimized by fraud.
In some cases, financial stress can be due to choices that aren’t in line with your needs. In other cases, people make choices that they think will help them get further ahead, but in reality may be a fraud or a scam. Fraud can come in many shapes and sizes, such as identity theft, fake emails or websites that trick you into providing personal financial information.
Victims of financial fraud know first-hand how stressful money concerns can be. Some victims of fraud lose their entire life savings, while others lose smaller amounts, however the psychological costs can be just as high. Being taken in by a con artist can rob people of their security, confidence, self-esteem and dignity. This type of crime frequently causes those who have lost money to lose the ability to trust others.
The first step in protecting yourself and your financial information is becoming informed. Many people tend to think that it will never happen to them, or that those who are scammed are naïve or ignorant. Did you know that anyone can be a victim of fraud?
The best way to lower your risk of being a victim of fraud is to know what to look for. Here are some things to keep in mind:
Beware of any emails that claim to be from an organization that you deal with asking you to confirm or give personal information. This could be a scam to obtain information about your personal finances and could lead to identity theft. Most reputable organizations won’t ask you for this and if they do need to confirm something, call them back by looking up their number in the phone book or on their website.
When purchasing insurance, it is not standard practice in the industry to ask you to pay your premiums through a money transfer or money wiring service. If you are requested to pay your premiums this way, it could be a scam.
Be cautious of anyone who suggests investing your money into something you don’t understand or who urges you to leave everything in their hands. When making investments, it’s always important to make sure you’re comfortable with the person you’re dealing with. Being able to ask questions and request more information without being made to feel like you’re a nuisance is also important.
Read and understand your contracts and keep your documentation, you never know when you may need to refer to it.
Watch out for sales people who prey on your fears and emotions.
Beware of “too good to be true” offers because they are likely just that. Scam artists like to use high pressure sales tactics for you to “Act now!” They get you to make a quick decision without giving you time to think, ask questions or get a third-party opinion.
Don’t be fooled by guaranteed high returns at “no risk.” These simply do not exist. The higher the return, the higher the risk.
It is okay to get a second opinion before you commit.
The best way to protect yourself and your family is to get informed on how to spend smart and spend safe. To learn more about your rights as a consumer and find out tips to stay financially healthy and to help avoid stress from financial concerns, visit FCNB’s fraud prevention month page for tips and resources.
For more on finding an ethical financial planner, read Buyer beware: is your financial planner qualified?, Finding your financial planner and All financial planners are not created equal: four things that set CFP professionals apart.