Keep your money safe from scams
Recognizing fraud is the first step to preventing it; ploys are so lucrative, organized crime is involved
Fraud is a profitable business for criminals. While it affects Canadians of all ages, those aged 60 to 69 are most targeted. Those aged 50 to 59 report the highest dollar losses.
Fraud tactics are becoming more sophisticated and when criminals see a lucrative opportunity, they’ll seize the moment no matter the victim’s age.
Thirty-one-year-old Elena Sosa Lerín’s was catching up with her friend Gabrielle via Skype when her cellphone rang. It was Gabrielle’s number. “So I pick up the phone and a woman’s voice in perfect English with a little accent asked: ‘Do you know Gabrielle?’ I said, ‘Sure.’
“Then she said: ‘Please stay calm, but I have to tell you we have your friend. She is OK for now, but she will not be if you don’t send $3,000 in four hours.’ ”
Sosa Lerín instinctively played the part. She knew her friend was safe; she was there in plain sight on Skype.
“So I said, ‘OK, how do I wire this money to you?’
“They gave me perfect instructions. I asked if I could talk to her to make sure she’s fine and they said, ‘No. Once you follow these instructions, she’ll be fine, and you’ll be able to talk to her.’ ”
Gabrielle was listening to the conversation and was shocked by what was happening.
Sosa Lerín told her to get off Skype and contact all of her relatives immediately.
“If they called me, and I’m just a friend, they’re obviously going through her contacts in her cellphone. Turns out one of her cousins got a call and she was really concerned.
“If I hadn’t been on Skype with my friend, who knows?”
Although the false-kidnapping scam is rare in Canada, schemes centred on bogus emergencies are on the rise. The Canadian AntiFraud Centre reports they are now among the top three scams.
These schemes, involving a hit man, a grandparent, a kidnapping or an inheritance, are one and the same. They are all based on the same basic premise and are all designed to convince people to abandon their good sense and act out of fear or anxiety, because they are led to believe there is an emergency.
“There’s almost a template,” says Det.-Sgt. Cameron Fields of the Toronto police corporate crimes unit. “There’s always an emergent situation: that if you wait any longer than right now, bad things are going to happen.” The RCMP, OPP and Toronto police estimate that fraud-related offences cost the Canadian economy upwards of $10 billion annually.
It’s so lucrative that organized crime groups are shifting from what officials call high-loss, highpenalty crimes, such as racketeering, prostitution and drugs, towards more mainstream, fraud-based crimes.
“We’re seeing a real migration of resources,” says Fields. “They’re now victimizing regular Canadians, not criminals.”
Stealing your hard-earned dollars is a safe business for them, because “there are virtually no casualties, no one is shooting at them, and jail time is shorter,” he says.
By far, the most successful and highest-grossing frauds are based on mass-marketing. They are perpetrated using phone, Internet and mail or email.
Older Canadians are targeted more often in these cases because, generally, they have more discretionary income. They’re also likely retired and may have more time to answer a phone call or respond to a letter.
“They get email addresses for legitimate people and they’ll go phishing. They’ll send out an email and say you’ve won the lottery, congratulations!
“If they’re sending these emails to 50,000 people and they’re asking for $500 or $3,000, if only 200 people answer, just do the math. They’ve made a ton of money just by pressing ‘send,’ ” Fields says.
The Competition Bureau says the best way to protect yourself is to recognize the signs.
But fraud doesn’t always come in the form of a scam. It occurs whenever someone is parted from their money under a false pretense. You can play an active role in your own victimization, or you can do it unwittingly.
Jenny Scott, 33, of Peterborough, can’t tell you how her credit card number landed in the hands of criminals oversees. “Among my $40 gas purchase in Peterborough and $30 purchase at a grocery store in Toronto, there were 800-euro purchases in Paris and 1,300-euro purchases in Germany.”
Scott was prudent and called the bank right away. They assured her they would take care of lost funds, and that credit-card customers have zero liability.
“It stressed out my husband more than it stressed me out. He had the reaction I expected I would have had, which was ‘Oh, my god, we’ve been robbed!’ ”
Scott’s story is so common that, in 2011, the last year for which data is available, financial institutions reimbursed $436 million to Canadian credit-card customers as a result of criminal activity, says the Canadian Bankers’ Association.
But the question of liability and responsibility for lost funds isn’t always clear-cut.
If your debit or credit information is stolen, and you report the fraudulent activity in a timely manner, the bank will reimburse you for any lost funds.
In the case of identity theft, where your essential documents, such as your social insurance number or passport, are stolen and used to open new accounts, banks will likely bare the brunt. But the onus is on you to prove your case, which can take months.
“The vast majority of time, when there’s fraudulent documents, banks will reimburse because everything was negotiated with the bank. They accepted the documents to be true and allowed the money to leave the account,” says Fields.
Identity theft is common. The anti-fraud centre reported 17,000 cases in 2012, or 46 new cases every day, which cost victims a total of more than $16 million.
Falling victim to a scam may be the worst-case scenario.
“In that case, they’re out the money,” says Fields. “And that’s the heartbreaking part. The grandparents scam, the romance scam, the hit man scam ... in cases such as these, the actual victim is responsible for the loss.
“People need to know, you can’t get something for nothing,” he adds. “There will be a hook where you have to pay money. And that’s where the fraud is.”