Fraud is escalating at an alarming pace in Canada, driven by increasingly sophisticated tactics such as social engineering, deepfakes, and large-scale online scam operations. Despite growing losses, the current approach remains fragmented – organizations often treat fraud as a cost of doing business, enforcement is inconsistent, and accountability across the ecosystem is limited. As a result, Canadians continue to bear the financial and emotional burden. A more coordinated, transparent, and enforcement-driven strategy is urgently needed to reverse this trend.
The Canadian government introduced the National Anti-Fraud Strategy in its 2025 budget and is now inviting public feedback—a timely and necessary step as the threat landscape continues to evolve.
To ensure meaningful impact, regulators should adopt a phased approach to rolling out anti-fraud measures, balancing transparency, accountability, and enforcement.
Phase 1: Awareness and Transparency
The first step is increasing visibility into the true scope of fraud in Canada. Regulators should require financial institutions to publicly report key fraud metrics, including total fraud losses by type and customer reimbursement rates.
This approach has proven effective in the UK, where annual fraud reporting requirements have driven greater accountability and informed both policy and public awareness. Publishing this data empowers consumers, incentivizes institutions to improve, and establishes a baseline for measuring progress.
Phase 2: Regulation and Enforcement
Fraud is too often treated as a cost of doing business, leading organizations to implement only the minimum required controls—ultimately at the expense of Canadians. Regulators must shift this dynamic by setting clear, enforceable expectations.
Enhance international collaboration
Strengthen partnerships with global law enforcement agencies to more effectively combat transnational fraud networks. With Southeast Asia serving as a major hub for modern scam operations, collaborating with local authorities is essential for dismantling these networks and recovering lost funds.
Strengthen law enforcement capabilities
Invest in specialized domestic financial crime units equipped with the expertise and resources to investigate and dismantle sophisticated fraud operations. For example, the Richmond RCMP’s Economic Crime Unit has achieved notable success in helping residents recover funds lost to scams and fraudulent activities.
Establish minimum fraud prevention standards
Prescribe baseline controls for high-risk industries (healthcare, financial services, telecommunications, government, technology) supported by regular audits similar to financial reporting, anti-money laundering (AML), and privacy frameworks. These should be backed by meaningful financial penalties to ensure compliance.
Establish minimum fraud prevention standards for financial services
Require financial institutions to implement essential safeguards, including fraud awareness programs, multi-factor authentication, step-up verification for high-risk transactions and activities, chip and PIN verification in branch, and advanced fraud detection systems. Additionally, FINTRAC should phase out the credit file method for verifying individual identities, as the name, address, and date of birth of most Canadians are widely exposed through data breaches. This method no longer provides adequate protection for opening financial accounts online and must be replaced with stronger verification controls.
Establish minimum fraud prevention standards for digital platforms
Require digital platforms such as social media and online advertising networks (Facebook, Instagram, Google, TikTok) to verify advertisers and reduce scam proliferation. Australia introduced a similar requirement last year to combat SEO poisoning, deepfake scams, impersonations, and fraudulent merchants.
Phase 3: Liability and Enforcement
Introduce a shared liability model
Implement a framework in which responsibility for fraud losses is distributed between financial institutions and consumers. This approach aligns incentives and promotes stronger fraud prevention practices across the ecosystem. In 2024, the UK’s Payment Systems Regulator required sending and receiving banks to share fraud liability equally (50%), except in cases of gross negligence. Building on this model, I recommend splitting liability equally (33.3%) among the sending institution, receiving institution, and consumer to maximize accountability and encourage proactive security measures.
Strengthen Regulatory Audits and Enforcement
Establish a rigorous audit regime with regular supervisory reviews to ensure organizations are meeting prescribed fraud prevention standards. These audits should be backed by material financial penalties for non-compliance to drive meaningful change. In cases of systemic or willful negligence, regulators should also consider introducing executive-level accountability, including potential criminal liability, to ensure fraud risk is treated as a core organizational priority rather than a compliance checkbox.
Conclusion
A phased strategy grounded in transparency, accountability, and enforcement will strengthen protections for Canadians and improve the resilience of the financial system.