Becoming Fraud Aware - BBB - Scam Alert - March 2007

By Mayo McDonough


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March is Fraud Prevention month across Canada. The Better Business Bureau (BBB), law enforcement, banks, businesses and other consumer and business protection agencies join forces to educate the public so they can recognize, report and stop fraud.

While it may be hard to believe that one could become a victim of fraud, the reality is that thousands of people, of all ages and ethnicities, fall victim to identity theft, e-mail and phone fraud each year.

In the last month, the BBB learned that the parent company of Winners and HomeSense had their consumer database hacked into, which exposed the personal information of over two million Canadians.

Talevest Mutual Funds had a hard drive go missing during transport between Montreal and Toronto that led to the disappearance of personal data for 470,000 clients.

The Canadian Department of Finance reported the distribution of fraudulent (phishing) e-mails, which promised a tax refund if an appended form requesting personal information was filled in and returned.

And the RCMP dismantled a telemarketing fraud ring that targeted consumers with poor credit histories, falsely offering debt consolidation and reduced interest rates, for a fee.

On a smaller scale, consumer after consumer called the BBB after receiving phones calls stating they had won a vacation prize package. Many were asked to provide their credit card number in order to book their free holiday vacation. And every day, consumers receive e-mails, phone calls and mail promising large lottery winnings that can be cashed in for a comparatively small fee.

No matter what the scam, the purpose of these elaborate plots is to steal people's financial information or their "identity," so that the scam artist can profit, while the victim suffers. Scam artists are creative and savvy at pulling these stunts off, and everyone is susceptible.

Statistics compiled by PhoneBusters in 2005 and 2006 demonstrate the degree to which phone fraud has evolved in the past couple of years. In 2005, there were 12,409 reported cases of identity fraud in Canada, totalling nearly $9 million in losses. In 2006, there were 7,778 reported cases, totalling over $16 million in losses. There may be fewer victims one year to the next, but the financial impact of ID theft has increased dramatically over the past two years.

Another interesting statistic is the age range and financial losses experienced by victims of telemarketing prize and lottery frauds. In 2005, 72 per cent of reported victims of this type of fraud were under 60 year of age, while 28 per cent were over 60. The total average dollar loss per victim was about $11,000. In 2006, 60 per cent of victims were under 60, while 40 per cent were over. The total average dollar loss per victim in 2006 was closer to $5,000. This means between 2005 and 2006, victims lost less on average to telemarketing prize and lottery fraud, but more seniors became victims. And the impact of a $5,000 loss to many seniors can be devastating.

Rather than being terrified one might become a victim of fraud, the BBB recommends people take the time to educate themselves about the different scams and frauds that could impact them. PhoneBusters has detailed descriptions of current scams. Visit www.phonebusters.com for more information. The BBB posts regular news alerts on our Web sites about new scams impacting our region. Visit the current alerts page at www.bbbvi.ca

Victims of a fraud or scams should not be embarrassed to report it. By reporting incidents of fraud, not only do victims help themselves, they also provide enforcement agencies with valuable information they can use to catch the thieves.

What to do when fraud is identified:

- Victims of fraud should contact their local RCMP Detachment or police service. Also, be sure to contact financial institutions to report the fraud, and patiently work with them to see if the money can be returned. In many cases, money lost to fraud cannot be recovered.

- Forward a copy of fraudulent e-mail to PhoneBusters at info@phonebusters.com where their intelligence gathering unit, called the Canadian Anti-fraud Call Centre (CAFCC), collects and reviews such scams.

- Nigerian/West-African letters received via e-mail or mail should be forwarded to PhoneBusters as well. PhoneBusters is interested in copies of any "new" versions of Nigerian letter schemes, particularly those involving Canadian mailing addresses or telephone numbers.

- To verify the legitimacy of an offer, contact the BBB to check out the company and discuss the potential offer or scam before sharing any personal information. The BBB will often know if a scam is being targeted in a specific area, and work with enforcement agencies to share information about suspect companies.

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