Types of Fraud and Scams

Thousands of Canadians are defrauded each year. Scam artists are up to date and well-organized.

They use the latest trends and sophisticated techniques:
- Professional marketing materials.
- Well-crafted and researched telephone scripts, which are traded among criminals.
- Putting you at ease with their friendly tone and "generous" offer.
- Having believable answers ready for your tough questions.
- Impersonating legitimate businesses, charities, and causes.
- Expertly using your own emotions against you.
- These are professional criminals. They know what they're doing and, unfortunately for their victims, they do it well.
- The price for a product is much less than the price for the same product on the open market.
- You are offered a large payment or reward in exchange for allowing the use of your financial account - often to deposit cheques or transfer money.

Identity Theft
Identity theft happens when someone steals your personal information - your social insurance number, driver's license number, health card number, credit card number, debit card, or your PIN number.

Criminals get this information in a number of ways including stealing your cards, posing as an employer, credit union or utility company employee, grabbing information from websites that are not secure, sorting through garbage, or using devious ways to find out your PIN number. It can happen to anyone. In the course of a busy day people use an ATM to get money for groceries, charge tickets to a hockey game, mail their tax returns, call home on their cell phones or apply for a new credit card. We don't give these every-day transactions a second thought. But someone else does - someone who is interested in using these every¬day transactions to steal your personal information and use it to commit fraud or theft.

Once they have your card information and your PIN number, criminals can open a new credit card account or financial account in your name. And the worst thing is, you won't know about it until it's too late.

Phishing
Phishing attacks use 'spoofed' (look alike) email messages and fraudulent websites designed to fool recipients into divulging personal financial data such as credit card numbers, account usernames and passwords, social insurance numbers (SIN), etc. By hijacking the trusted brands of well-known financial institutions, online retailers and credit card companies, phishers are able to convince up to 5% of recipients to respond to them.

Advanced Fee Loans
Ads that promise loans generally appear in classified sections of local and national newspapers, magazines and tabloids.

Remember: simply advertising through recognized media outlets does not ensure the legitimacy of the company behind the ad.

Some companies claim they can guarantee you a loan even if you have bad credit or no credit. They usually request an up front fee, which may range from hundreds to thousands of dollars. Once you send your money to these companies, you never get your promised loan and you cannot get your money back. If you cannot get a loan through traditional lending institutions, it is unlikely that you'll get one in response to a classified ad. Ask the loan company to take the amount of their fee off of the total amount of the loan that was promised you. In most jurisdictions, it is illegal for a company to request an up front fee prior to obtaining a loan.

Nigerian Letters
You receive a letter via fax, mail, or email (most common) which asks for you help in transferring funds out of their native country in exchange for a portion of the money. Typically, the sum of money is in the thousands or even millions. The letter will ask you to send off your account information along with personal information in order to complete the transfer resulting in identity theft or withdrawals from your account. Other variants of the Nigerian Letters requires respondents to send off processing fees in order to receive the funds.

False Charities
Bogus charities often use names that are very close to the names of legitimate and respected charities. The end of the year is the peak season for charity appeals. It also is the peak season for the bogus charity appeals.

Warning signs

    * High pressure or threatening telemarketers who want you to contribute immediately.
    * Someone calls and thanks you for a pledge you don't remember making.
    * Copycat names. Names that might be misleading or deceiving.

Cheque Overpayment Fraud
Overpayment scams is the type of fraud where the person receiving the cheque is actually owed money for goods sold.   The seller receives a counterfeit cashier's cheque personal cheque or corporate cheque from the “purchaser” in an amount in excess of the amount owed; is asked to deposit the cheque and wire the excess funds immediately back to the sender/purchaser or the purchaser's agent or shipper; and, the deposited cashier's cheque is subsequently returned as counterfeit and charged back to the seller's account.

Prize Pitch
One of the most common scams is the "prize pitch". Consumers are told they have been specially selected to win a prize, or have been awarded one of three or two of five prizes. These prizes usually include cash or a vehicle. You must purchase a product and pay in advance to receive your prize. These products may include "coin collections", personalized pen sets, etc. The products are generally cheap or overpriced, but may sound valuable over the phone. Remember, in a legitimate contest you do not have to purchase a product to qualify for a prize.

You may also encounter the "sweepstakes scam". After entering a fake sweepstakes contest in the mail, you will receive a call within two to four weeks from a fraudulent telemarketer. This person will usually identify themselves as a lawyer, judge, customs agent or other official. They will represent themselves as an agent for a particular company. You will be told that you have won a large cash award, but money must be sent up front for taxes, etc.

Visit http://www.phonebusters.com/english/recognizeit.html for more details on these and other scams.