Canadian ‘tax scam’ loses steam after raid on Mumbai call centre

Canada officials say a number of phonebased swindles originate from India

TORONTO: One of the biggest scams affecting Canadians in recent years has registered a sharp decline following a police raid on a call centre in Mumbai late last year, underlining the link between India and such frauds.

Known as the ‘tax scam’, it involved persons impersonating agents of the Canada Revenue Agency (the equivalent of India’s income tax department) and calling consumers and threatening “their targets with financial penalties, lawsuits, and even arrest if they don’t pay back the taxes they supposedly owe”, the Better Business Bureau (BBB) said.

The con artists also posed as Internal Revenue Service agents while calling people in the United States.

While phone-based scams have bedevilled people in North America, there were indications that a portion of these originated from rogue call centres in India.

The aftermath of the Mumbai raids, which led to nearly 70 employees there being charged with fraud and other crimes, is the clearest evidence of that link.

In a statement listing its top 10 scams of 2016, BBB said, “Our number one scam from last year has been in decline. A call centre in India was raided and the dreaded Canada Revenue Agency Tax Scam dropped off dramatically.”

Evan Kelly, a spokesperson for BBB in Canada, said there had been a steep “80% to 90% drop-off” in complaints regarding the scam. At its peak, those complaints numbered between 300 and 400 each week. BBB in the United States reported that “one in four” reports on its online tool, BBB Scam Tracker, were related to the tax scam.

However, not all the news related to scams have been positive. The amount that people were defrauded of in 2016 rose to more than $90 million, a nearly 50% increase over the previous year, some of it attributed to increased reporting.

Kelly said the amount of money reflected just a fraction of the quantum of scamming that occurred as the vast majority of incidents were remained unreported.

According to a December 2016 statement from the United States arm of BBB, there were more than 7,500 reports of the tax scam. Kelly said, “We get a lot of scams that are foreign-based, a lot are internet-based.”