Interac e-Transfer®: How to better protect yourself against fraud

12 October 2021 by National Bank
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Payment by Interac e-Transfer® has become increasingly popular in recent years, and for good reason—it’s a simple way to send or receive money, pay for a purchase or service, or reimburse someone you owe money to. As with any type of monetary transaction, caution is essential to protect yourself against scams. Here are best practices to keep in mind.

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How does Interac e-Transfer® work?

Interac e-transfer® is a tool that allows money to be sent electronically between two individuals or to a business. You can use it to send money across Canada and internationally to certain other countries.

Once an Interac e-Transfer® has been accepted by the recipient, it can no longer be cancelled. You can cancel a transfer only if the recipient has not yet accepted the funds, but some fees may apply.

An Interac e-Transfer® is not governed by “zero liability” protection rules as is the case with credit cards, for example. Users are therefore responsible for ensuring they are sending money to a legitimate recipient. Take the same precautions as you would for a cash transaction.

How secure is Interac e-Transfer®?

Interac e-Transfer® is designed to let you send money with peace of mind as the system is protected by multiple levels of security.

When you create an Interac e-Transfer® in your banking application, the recipient will receive a text or email with instructions on how to retrieve the funds. They will be prompted to answer a secret question to which you have given them the response.

Behind this simple and user-friendly process are technologies such as transaction encryption and a method for authenticating the financial institutions involved in the transfer.

What are the most common scams and frauds that use Interac e-transfer®?

Cybercriminals are always looking for creative new ways to steal your money or information. It is important to distinguish between a scam and fraud. In the case of a scam, the Interac e-transfer® user is deceived and often tricked into sending the scammer money of their own accord. They may even be held liable for their actions in certain situations. In the case of fraud, the user is the innocent victim of a criminal who has managed to steal their money, sometimes without the victim even realizing it. 

Here are a few examples of scams.

  • Apartment rental scam: A fake landlord posts a rental property and claims to be out of the country. They request a security deposit via Interac e-transfer®. Once they cash your money, they break off all contact and disappear. To avoid falling for this kind of scam, never send money until you have seen an apartment for yourself.
  • Loan scam: An attractive loan offer starts appearing on your social media from an organization promising a very low interest rate. The fraudsters ask you to pay notary, insurance or other fees in advance through Interac e-Transfer®. A legitimate financial institution would never do that.
  • Online sales platform scam: You see something interesting on a classifieds site. The seller asks you for full payment via Interac e-transfer®, and then you never hear from them again. Never send money until you meet the vendor in person and have the item in hand.
  • Money request scam: You advertise items for sale on a website, and someone writes to you to say they’re interested. But instead of receiving an Interac e-Transfer® from this so-called buyer, you receive a money request. If you’re not careful, and you click the “accept” button, you’re the one who’s sending them money. Be sure to always read messages carefully.
  • Third party transaction scam: Someone contacts you and asks you to receive a large Interac e-Transfer® and then redirect it to them. In exchange for your help, they offer to let you keep some of the money. But you may be sending money that was fraudulently acquired without your knowledge. Keep in mind that if an offer seems too good to be true, it probably is, and someone is likely trying to mislead you.

With respect to fraud, a malicious person could directly access your online bank accounts and make Interac® transactions without your knowledge. Beware of phishing attempts. For example, someone sends you an Interac® deposit that you weren’t expecting. If you provide your personal information to retrieve the money, you may be handing it directly to an attacker. 

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How do I use Interac e-Transfer® safely?

Use a robust secret question and answer

This is key to protecting your transfer and confirming the recipient’s identity.

  • Use a question about something that only you and the recipient know or that will be impossible for a third party to guess. 
  • Avoid questions with yes or no answers, or answers that can be found with a simple online search (for example, “What is the capital of Barbados?”) Questions like “What colour is the sky?” or “What is my first name?” are also too easy.
  • Do not include the answer in the question, as in “The answer is house?” 
  • It’s a good idea to use different questions and answers for each of your recipients.

To avoid having your transfer intercepted, take precautions in letting the recipient know the answer to the secret question. The safest way is to provide the answer orally in person or over the phone.

If this is not possible, choose a different mode of communication than the one used to make the transfer. For example, if you’re sending a transfer by email, text the response to the recipient (or vice versa).

Good to know: One of the common techniques used by scammers is to send you an email or text message that looks like it came from your financial institution or from Interac®. The message will ask you to confirm your transfer by providing certain information such as the answer to the secret question. This is a trap set by fraudsters looking to intercept and cash your Interac e-transfer®.

Pay particular attention to Interac e-Transfer® direct deposit. When this function is enabled, the transfer is automatically deposited to the recipient’s account without the need to answer a secret question. A message will be displayed before the transfer is confirmed notifying you that the recipient has enabled direct deposit. If you’re sending money to someone you don’t know, make sure they’re who they say they are.

Tips for safely receiving an Interac e-Transfer®

When you’re on the receiving end of an Interac e-Transfer®, be sure to follow the same best practices that apply to all your online financial management:

  • Use strong passwords to access your bank accounts.
  • Use different passwords for your email inboxes, online bank accounts and social media accounts.
  • Avoid leaving an Interac e-Transfer® sitting in your inbox. Accept it as soon as possible—this gives scammers less of a chance to get their hands on the money “in transit.”

Be careful when buying or selling items on websites

There are great deals to be found in online classified ads, but stay alert to avoid getting taken in. If you’re buying an item, use Interac e-Transfer® wisely. Wait to see the item for yourself before sending the payment.

Make sure you’re dealing with a legitimate vendor. Try to find out more about them by visiting their profile on the site and then meet them in person. Only send Interac e-Transfers® to people you know or trust.

One way to show a vendor you’re serious while ensuring you don’t fall for a scam is to send them the money via Interac e-transfer®, but without giving them the answer to the security question. You’ll only give them the answer if you are satisfied with the item when you have it in hand.

Remember that for a purchase between individuals, there is no possible dispute with your financial institution if the transaction goes wrong or if you’re not satisfied with the item purchased. 

What do I do if I am the victim of a scam or fraud through Interac e-Transfer®?

If you receive an email that appears to be from Interac® but looks suspicious, be sure to check whether it’s valid before you click on any links. For example, if you receive an unexpected transfer notification from a loved one, contact them to see if they really did send money. When in doubt, contact Interac® to report the situation.

If you see any unusual transactions on your account or suspect you’ve been a victim of fraud or a scam, contact your financial institution immediately. You will be advised on the next steps and any action to take if necessary.

In short, Interac e-Transfer® is a valuable tool for everyday transactions, but as always, it’s essential to stay alert so that you don’t fall victim to a scam or fraud. For more information, you can visit our ABCs of Online Security section. We’re here to answer your questions.

Interac, The Interac logo and Interac e-Transfer are registered trademarks of Interac Corp. used under licence.

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