Living with the Uncertainty of Fraud

At the time of writing this article, CRA just announced another breach of accounts (see below).  The report stated that 5,500 accounts were compromised which means that personal information stored at CRA sites were accessed by hackers.  They know what the CRA knows.  Since they can do it, they will most likely do it again and that is very scary for most citizens.  It requires serious contemplation of our future.  How does that potentially affect our credit score?  Does it affect our banking?  What should we be doing to protect ourselves from future conflict?

It should first be understood by all Canadians that digitized personal information is not and never will be, completely safe in the world of high technology.  We cannot rely on encryption or even double encryption to protect us from having our information “out there”.  Sooner or later, bad guys will get our personal information.  They will know our SIN, address, employer and even names of family and friends.  It is not that people are not doing things to safeguard their information and in fact, there are many things that are extremely proactive in the defence of hackers and identity thieves.  However, our information is out at so many locations that we must assume that not everyone has adequate proactive defences (including CRA).

One of the best explanations of our situation is a one-hour talk by Frank Abignale at Google (look it up, it has millions of views and is easy to watch).  The “Catch me if you Can” movie origin lays out our situation very clearly.  We must first assume that our information (or much of it) is out there in the hands of the bad boys.  Our primary defence is three-fold: monitor, structure and defend.

Monitoring of our liabilities is first.  First, find out if anyone is using your name.  Are there cards and loans out there under your name that you have never initiated?  This requires a careful look at your credit records and what activity there is on it.  This should be done regularly, at least once every six months or when something strange occurs.

Structuring all our public financial activity through a credit card is Mr. Abignale’s primary push.  This means the virtual elimination of writing checks (which has all critical information clearly printed on one piece of paper including a copy of your signature).  Operating a business requires a checking account but exposing oneself to paper checks too many times increases long term risks.  Learn to pay using methods that are more safe than easy (if my father can learn… who refuses to provide CRA with his SIN… anyone can).  Personally, I have only one credit card for internet purchases only.  I never deviate from that formula.  There are NO exceptions!  This means when my card information is hacked/stolen (which I ASSUME WILL happen), it is only one card, and everything is insured.

Finally, there is the defending of our financial and personal lives.  This is probably the most critical of all protection activities.  Defending is the mindset of “NON-Gullibility”.  It is having a constant skeptical attitude towards releasing personal information beyond the basic “Name and possibly address”.  If anyone asks for banking information over the phone, proceed with extreme caution if you dare proceed at all.  No credible organization will ever ask for your banking information over the phone (or email, text, etc.).  We must understand what information is critical to your financial and identity security and what information is not.  Andy Grove (Intel’s prior CEO) wrote a book with a great title: “Only the Paranoid Survive”.  Everyone should hold to this mantra.  Every citizen must be vigilant in individual self-protection.

The key to building a great defence is wisdom.  Become a wise person in the society we live in.  Understand your personal vulnerabilities and learn the art of technological self-defence.  See a punch coming at you before you are hit; always know the environment you are walking in.  If you are buying something online… follow the rules you have made for your own safety.  Keep only trusted relationships open and close all others.

At our firm we do not have signing authority or access to clients’ accounts.  Though we have pre-authorized withdrawals, they are secured by a contract with the financial institution.  If we are accused of fraudulent activity, we could lose our contract with the institution and have our entire firm’s finances shut down.   That is a great example of a system that keeps someone accountable.  I am much more impressed with PAW than I am with some of the new “secure” ways of transferring money… yes, they are easy (and even secure) … but there is virtually no accountability in the relationship.  Once your money is gone… there is no way to hold someone accountable for it.

Being safe requires continual, non-stop scrutiny of every transaction and liability.  I suggest listening to Frank Abignale’s 1-hour lecture at Google.  It is well worth your time and builds a great foundation for further understanding.

About the Author:
Robert D. Scheper is a leading Accountant and Consultant to the Lease/Owner operator industry in Canada. His first book in the Making Your Miles Count series “taxes, taxes, taxes” was released in 2007. His firm exclusively serves Lease/Owner Operators across Canada. His second book “Choosing a Trucking company” is the most in-depth analysis of the operator industry available today. He has a Master degree (MBA) in financial management and has been serving the industry since he and his wife came off the road in 1993. His dedication, commitment and strong opinions can be read and heard in many articles and seminars.

You can find him and his books at or 1-877-987-9787. You can also e-mail him at

About Robert Scheper

Robert D Scheper operates an accounting and consulting firm in Steinbach, Manitoba. He has a Masters Degree in Business Administration and is the author of the Book “Making Your Miles Count: taxes, taxes, taxes” (now available on CD). You can find him at and or at 1-877-987-9787. You can e-mail him at: