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The taxpayer’s worries have increased with the news that their financial data and credentials submitted to a tax filing company have been compromised and used to acquire millions in illegal rebates from the CRA.
It is astonishing that, in the past four years, 31468 privacy breaches have compromised around 62000 Canadian taxpayers’ personal data.
While the Canada Revenue Agency runs awareness campaigns about avoiding financial fraud for taxpayers and about the red flags, scammers continue to upgrade their ways and means of operation. The CRA had been concealing this fact from the parliament, but now it has acknowledged that malicious elements are infiltrating loopholes.
The following reading examines this new kind of fraud and gives an overview of various aspects of financial fraud in tax matters.
How did it happen?
Identity theft is very common in financial domains, from real estate to taxpaying. In this case, the fraudsters used cybercrime in conjunction with the theft of personal data.
This cyber-attack targeted the most renowned tax preparation firms in Canada, exposing their clients’ details to malicious elements.
The crookes got unauthorized access to hundreds of Canadian taxpayer accounts, infiltrating and altering the direct deposit information.
Thereby, they submitted false returns.
Having done that, they went on to claim undue refunds amounting to 6 million dollars.
How Grave the Situation is?
The agency did not make the public aware of this scheme.
So much so that the agency did not report the breaches to the parliament.
Experts say it is just one example of many scams overwinding the CRA.
The auditors and investigators even fear the public might lose trust in the CRA.
The investigators also wondered how the public would trust this CRA to safeguard its dollars and personal information.
Is the CRA Breached?
The agency’s internal investigations have maintained that its databases are safe and that no intruder has been able to access them.
There are calls for an expanded investigation to realize the issue’s magnitude.
Activists call for more detailed investigations to determine how much money is involved.
It is astonishing that, in the past four years, 31468 privacy breaches have affected around 62000 Canadian taxpayers.
The agency took a carefully planned media line.
However, it is shocking that the agency concealed this information in its June 2024 report to the members of However, it is shocking that the agency concealed this information in its June 2024 report to the members of parliament. .
What is the "pay and chase" culture in the CRA?
The CRA will give away the refunds as efficiently and quickly as possible to improve its image as a quick-response agency eager to refund. This is a ”pay and chase” culture.
However, it makes it complicated to avoid fraud.
This culture gives fraudsters a chance to try to get refunds before the CRA assesses their legality.
If the CRA makes reclaiming refunds a stringent procedure, the overall refund process and mechanism will become less lucrative and time-consuming, making things difficult for the public at large.
What should you do to avoid fraud in tax matters?
- Ensure password security
Simple and straight passwords of your taxpayer account is easy for hackers to crack. Therefore, choose more complex and long passwords. Your password should include special characters, digits, and alphabets and should be at least 8 to 10 digits long. It is also advisable to use a password manager.
- When in doubt, talk to someone
It is common for scammers to cut a taxpayer from the rest of the world and make them live in a bubble of illusion created by them. In such circumstances, it would be wise to talk to someone about the suspicious demands, particularly your lawyer or any other expert.
- If it sounds suspicious, it is!
When you remain vigilant, you can spot odd patterns on the websites you visit or in the phishing attempts you undergo. So, if you ever realize that the website you are visiting or the task you are performing does not appear to be original, you should leave it.
- Tighten your cyber security
Your device or computer is your first protection against attacks and to protect your taxpayer account. Therefore, you should keep it well in shape by installing a good antivirus, keeping your operating system up to date, and implementing a good internet security system.
- Always check if the website is secure
You should keep an eye on the address bar. The website’s domain should begin with HTTPS and not HTTP. The additional s means that the connection is encrypted, which means that all the data you sent is encoded, and hackers cannot read it.
Keep in mind some common red flags
The most common red flag is the use of threatening or abusive language. Know that the CRA will never use abusive or threatening language against you.
Seeking personal financial information is another alarming sign you should look out for.
Similarly, if they are asking you for an immediate payment, that also shows that it includes some degree of scam
Conclusion
As data security systems evolve and become more sophisticated, so do the modus operandi of malicious elements. So, first and foremost, it is the responsibility of the taxpayer to keep his data identity and credentials safe and to keep his eyes open when dealing with data that can have financial implications.
For more information and smooth, secure tax filing, you can contact Faber LLP, come on board, and get free from any such worries.