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

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. When you initiate an Interac e-Transfer through your banking app, and the recipient hasn't set up Autodeposit, they will receive instructions via email or text message on how to claim 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.

→ Consult our article to learn how to protect yourself against rental scams

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.

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.

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.

Money deposit scam

It's tax season and you receive a text from the Canada Revenue Agency informing you that a tax refund is ready to be deposited into your account via Interac e-Transfer. It's in fact a fraudulent message. Before opening a hyperlink, stop and take the time to judge the relevance and veracity of the communication. If in doubt, contact the issuer.

In some situations, the person or network behind the scam could take advantage of the opportunity to obtain your personal information to directly access your online banking accounts and make transactions without your knowledge. This is called fraud. If you provide your personal information to retrieve money, you may be giving it to fraudsters.

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 that have obvious answers or that can be found with a simple online search. For example, “What is the capital of Barbados?”, “What colour is the sky?” or “What is my first name?” are questions to be avoided because their answers are too easy to find.
• 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 tell the answer 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).

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

You can find great deals 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 and 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 if possible.

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 see any unusual transactions on your account or suspect you’ve been a victim of identity fraud, contact your financial institution immediately. You will be advised on the next steps and any action to take if necessary. Contact Interac® to report the situation, and the Canadian Anti-Fraud Centre by filling out an official form.

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.

Want to learn more about how to protect yourself against fraud? Take a look at some of our practical tips.