How to send money safely and avoid e-transfer scams

How do e-transfers work?

If you’re already signed up for online banking, it’s pretty easy to send money to anyone in Canada with an email address and a Canadian bank account.

All you need to do is log into your bank and choose the option to "add a payee." Then add the person or place of business using their name and email address. You can also use the person's mobile phone number, either in conjunction with their email address or instead of the email address.

Now, go into your online bank account or financial institution's app and follow these basic steps:

1. Choose the amount you want to send
2. Pick the account you want the funds withdrawn from
3. Select the recipient, or add a new one to your list
4. Enter a security question that only the recipient knows the answer to

When confirmed, the funds are instantly pulled from your account and are available to the recipient as soon as they accept the transfer. Only the notification is sent through email; the actual funds are settled through secure fund transfer networks. If the person receiving the funds (aka: the recipient) is set up for automatic deposits, the funds will deposit into their bank account automatically.

Unless the recipient is depositing funds into a savings account with strict transaction limits, most e-transfers are free to receive.

In most cases, you should also not have to pay to send an e-transfer — unless your bank account package limits the number of free transactions per month.

For bank accounts with unlimited e-transfers, check out:

• Simplii Financial No-Fee Chequing Account: New customers are eligible for a $400 welcome bonus
• BMO Performance Chequing Account
• EQ Bank's Personal Account
• Scotiabank's Preferred Package

Caps on how much money you can send

In almost all cases, there will be a limit on how much you can send on a daily or per transaction basis.

There will be a limit to the amount you can send — either a daily maximum amount or a per transaction limit, or both. In most cases this limit is somewhere between $500 and $3,000 per day; however, you can reduce or increase this amount if you put in a request with your financial institution. Either call customer service (or use the online chat or send an email) and you should be guided through the process of updating your daily e-transfer limits.

Transfers are typically time-sensitive, so the recipient won’t be able to deposit the funds after the window closes. You can also cancel your e-transfer, as long as you do it before the person has accepted the e-transfer and deposited the funds.

How to receive e-transfers

If you plan to receive e-transfers on a frequent basis, you can set up an automatic deposit. This eliminates the need for the sender to create a password that you must enter in order to get this cash. This process is often called an auto-deposit and allows senders to e-transfer you funds without your need to approve the e-transfer or enter a password.

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5 tips to help protect against e-transfer scams

Sending money with Interac e-transfers is safe but not foolproof.

Here are five ways to keep your e-transfers safe and secure.

1. Send and accept email transfers from people or businesses you know and trust

Stick with sending e-transfers only to people or businesses you trust.

Transfers are like cash payments, and it’s very hard to dispute or reverse these transactions once the recipient deposits the money.

The same advice goes for receiving e-transfers. An Ontario student lost $1,000 in August 2020 when an e-transfer he accepted for an online sale turned out to be fraudulent.

Be extra suspicious if the transfer is unexpected. If it comes from someone you don’t know, or you aren’t owed any money, don’t reply or click any links. Fraudsters will go to great lengths to try to legitimize their emails, even using company logos and similar addresses.

If the message comes from someone you know and trust, contact them in a different way to confirm the transfer is real.

2. Use a secure internet connection

If you’re banking on the go, use your cellular data instead of public Wi-Fi. Public Wi-Fi is unsecured and this allows hackers and thieves the ability to hack your online bank account or even your email. Never start or complete a financial transaction using public Wi-Fi.

You should also avoid sending e-transfers on shared computers — even a friend or family member’s computer or phone. They may not have adequate security settings or be prudently guarding against fraudsters.

3. Create strong security questions

You wouldn’t leave a safe unlocked, so don’t leave your digital cash unsecured. A good defence against cyber-theft is to protect your bank accounts and your money using a strong password. Avoid common words and don't repeate passwords — using one password for multiple sites.

In early 2020, a Peterborough, ON, woman had her e-transfer intercepted by a thief when she used the security question: “Who is my favourite Beatle?” The cyber-thief was able to guess the answer and steal the money.

When setting up an Interac e-transfer security question and password, only use a reference your recipient would know. For example, ask the business to enter the invoice number or ask your friend to type your middle name, in order to accept funds.

For online passwords, consider creating a unique string of characters and numbers, but be careful sharing the answer. Don’t send it over email or give hints through the e-transfer itself.

4. Try out auto-deposit

You can also guard against e-transfer scams by signing up for auto-deposit. By setting up an automatic deposit, all transactions sent to your email address are automatically deposited into your bank account.

It’s also more convenient, as you can skip the steps that require you to enter a password or answer a security question.

That means that even if fraudsters gain access to your email account, they can’t intercept the e-transfer.

5. Practice internet safety

The best chance fraudsters have to access your e-transfer is by gaining access to your email account.

Be careful about the information you share online, including any personal information that hackers could use to access your accounts. You may want to consider using two-factor authentication for your email account.

Plus, stay vigilant against phishing attacks, where thieves try to target you with fraudulent emails that look legitimate in order to steal your personal data. When in doubt, call the fraud or customer service line for the business you are dealing with to confirm what information is required to complete a transaction.

Sources

1. Payments Canada: Canada reaches $11.7 trillion in payment transactions in 2022 – up seven per cent in value from 2021 (October 5, 2023)

— with files from Romana King