Home improvement scams are the riskiest type of scams for Canadians in 2022, says the Better Business Bureau.
The BBB’s Canadian Risk Report, released Monday, said Canadians reported nearly 1,300 scam reports to the BBB’s Scam Tracker, which helps the group assess the risk of each type of scam, sheds light on which scams are popular and who is being targeted.
Here’s what you need to know:
What’s the riskiest type of scam?
Home improvement scams took top place in 2022, pushing cryptocurrency scams — 2021’s top scam — to second.
With more people spending time in their homes during COVID-19, the renovation industry saw a boom. Scammers, also, saw an opportunity, with home improvement scams jumping more than 51 per cent last year compared to 2021.
Home improvement scams are usually perpetrated by door-to-door solicitors who approach homeowners and convince and charm them to let them do renovations or repairs.
“If someone approaches you, that’s a reason to be wary,” said Neesha Hothi, director of marketing and communications for the BBB in mainland BC and Yukon.
In many cases, these fraudsters take the money and skip out on the job. In some cases, they do shoddy work or hike the price after the original agreement, then threaten to walk if the home owner doesn’t shell out more money.
These scams can also be perpetrated online through advertising offering great deals. They often occur after a natural disaster, said the BBB.
The median loss is $1,900, nearly triple the $661 median loss in 2021. They also have the highest susceptibility ranking out of the listed scams, meaning a higher percentage of consumers who were exposed fell for the scam and lost money.
The BBB advises homeowners to be wary if they get approached by a salesman offering quick and inexpensive renovations.
Say no to cash deals, high-pressure sales tactics, upfront payment requirements and handshake deals. Make sure you have a written contract. Ask for references, and check them. Also confirm that the vendor will get the required permits.
What are the new scams?
New to the top 10 list are investment scams (No. 4), rental scams (No. 7), and travel/vacation/time share scams (No. 9), said the BBB.
People who fall prey to investment scams lose the most money, with a median loss of $5,500. The median loss in rental scams is $1,600, while the median loss in travel-related scams is about $1,000.
What’s the most common scam?
Online purchases. Nearly a third (32 per cent) of Canadian scam reports were online purchase scams.
In this scam, scammers offer promising deals, but skip out on delivering the product or service once payment is made. In some cases, scammers send poor quality or counterfeit goods.
People who were exposed to this type of scam tend to be susceptible, with nearly 77 per cent of people reporting a financial loss when targeted. Online scams are the riskiest scam for people ages 35 to 64.
The amount people lose, however, is relatively small at $102.
Aside from losing money
The impact of scammers goes beyond the monetary loss.
“It’s a lot more emotional than it is financial,” said Hothi.
About 57 per cent of consumers reported losing time. Nearly half, or 47.5 per cent, reported losing confidence or peace of mind after being targeted by a scam, while 39 per cent had to deal with the loss of personal information.
People who reported losing money more than three times are more likely to say they panic during stressful situations, feel financial stress, are isolated, live alone or have fewer friends.
What are the BBB’s top 10 scams of 2022?
1. Home improvements
3. Advance fee loans
6. Online purchases
8. Credit cards
9. Travel/vacation/time share
10. Phishing/social engineering