This is a guest post by Sam Peters
If you have been watching any daytime television over the past fifteen years, you know there is strong competition for your mobility dollar. Your government sponsored healthcare is willing to spend big money on your increased mobility and companies are in a marketing war to receive those benefits. Gone are the days of walkers and manual wheelchairs and in are the days of power scooters and wheelchairs. It is easier than ever to keep an active lifestyle.
According to the RCMP, several Calgary residents tricked 24 elderly or disabled Americans out of about $3 million over a three-year period by telling them they had won a lottery. This lottery scam targeted U.S. seniors.
Between 2005 and 2008, the victims were contacted by letter or phone and told they had won a lottery or sweepstakes but were required to pay taxes, administration fees or lawyers’ fees before they could collect winnings, which didn’t exist.
One person sent in between $500,000 and $1 million, with the scam collecting about $3 million in total. Some people lost their life savings, and have been ostracized by family or have been forced to remortgage their homes. Others in their 70s had to return to work.
Investigators have arrested four people from Calgary, one from Burnaby, B.C., and one from Toronto. Canada-wide arrest warrants are outstanding for three other suspects who police believe are in the Calgary area.
The Cheque Over-Payment Scam is the main topic in the Canadian Banking Association Fraud Prevention Tip monthly newsletter just received. Their Safeguarding Your Money web page has an e-mail link by which you can subscribe to the newsletter.
The cheque over-payment scam is also known as advanced payment fraud. The scam usually begins with a letter or e-mail asking for assistance cashing a cheque. The details behind the request may vary – some scammers may ask for help securing an unclaimed inheritance, others may name you a winner in a lottery you don’t remember entering or they may offer to buy something you are selling online or through a newspaper ad.
Regardless of the details, all will send a cheque, all will ask you to cash it in your own bank account, all will request a certain portion of the money be returned to the sender, and all will offer to let you keep the difference for your trouble.
An Australian government website details how the scam proceeds.
The scammer will invent an excuse for the overpayment. For example, the scammer might tell you that the extra money is meant to cover the fees of an agent or extra shipping costs. The scammer might just say that it was a mistake they made when they wrote the cheque.
The scammer will then ask you to refund the excess amount—usually through an online banking transfer or a wire transfer (such as Western Union). The scammer is hoping that you will do this before you discover that their cheque has bounced. You will have lost the money you paid into their account, and if you have already sent the item you were selling, you will lose this as well.
The RCMP warns that this scam is very prevalent at the moment:
Numerous complaints have been received recently of counterfeit cheques and the overpayment scam being used to entice sellers on online markets to accept these cheques as payment for items they are selling.
Perhaps the most surprising confirmation of this was an apparently genuine offer to buy tutoring services from me that has just ended as I write this post. Lo and behold the final message from John Hill [j.hill1200@yahoo.com] of London read as follows (typos included)
Hello,
Thanks for your message. I would be more than happy if you can handle Paul, my son, very well for me because is all I have left ever since his mother died four years ago. Payment for the lessons will be made upfront like I told you and will be by Certified Cashier’s Cheque. In view of this I will need you to email me the information required to send the payment as I will not like to send the payment to a wrong location.
I have contacted my business associate that he should make my funds available in payment of some farm equipment I supplied to him. He assured me he would make the payment (Cashier’s cheque) available and send you the cheque. I also want to let you know that the payment is a bit more than the cost for the six month lessons. So please, as soon as you receive the check I will like you to deduct the money that accrues to the cost of lessons and you will assist me to send the rest balance to my cousin. I would have asked my associate to issue two separate checks, one for you and the rest to my cousin but like I told you that my cousin is currently in europe with my son and will not be able to cash a check drawn from Canada bank. The remaining balance will cover the funds for Paul and my cousin’s flight expenses down to Canada, also to cover his living expenses over there and to buy the necessary materials needed for the lessons. I think, I should be able to trust you with the remaining balance? Am also ready to compensate you with additional $100 for the extra services you are doing for me. I will give you the details of my cousin that you will send the balance of the money as soon as you receive the cheque. Here are some of the details I will need for final assurance of the payment to you.
Needless to say that was the end of that attempted cheque over-payment scam.
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Grandson Scam is the name this time around. The RCMP have shut down a ‘grandson scam’ in west-end Montreal, which operated out of money transfer outlets
RCMP officers yesterday raided 16 Western Union and MoneyGram outlets that were allegedly involved in an international telemarketing scam that touched hundreds of seniors in Canada and the United States.
The fraudster poses as the grandson of the victim and pretends to be in financial trouble in a foreign country. The caller then asks the “grandparent” to send a money transfer, promising to pay the money back upon returning home. Victims were allegedly bilked out of a total of $3.5 million.
1,000 people filed complaints with the RCMP and about 80 per cent had given money as requested. The RCMP warns people against transfering money without knowing for sure who it is going to.
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Given the difficult economic conditions, everyone is eager to get any income tax refund they may be due from the Canada Revenue Agency as quickly as possible. Knowing that, the scam artists try to phish, or in other words get unwary people to give personal information that will allow them to be defrauded. That is why last August, the Canada Revenue Agency warned Canadians of a mail scam.
The Canada Revenue Agency (CRA) is warning taxpayers to beware of a recent scam where some Canadians are receiving a letter fraudulently identified as coming from the CRA and asking for personal information. The letter is not from the CRA. A PDF version of the letter is available on the CRA Web site at www.cra.gc.ca/alert.
The letter claims that there is “insufficient information” for the individual’s tax return and that in order to receive any “claims,” they will have to update their records. The letter attaches a form specifically requesting the individual’s personal information in writing, via fax or email, including information on bank accounts and passports. This letter is not from the CRA and Canadians should not provide their personal information to the sender.
All taxpayers should be vigilant when divulging any confidential information to third parties. The CRA has well established practices to protect the confidentiality of taxpayers’ information.
It appears that the scammers have moved online according to a former CRA employee, who warns all to beware of online tax scams.
Robert Day says taxpayers should be wary of the information they’re willing to give up online during tax season. Even though he worked for the Canada Revenue Agency for 30 years, he fell for the scam.
When Day clicked on a link inside an official looking email that appeared to be from the Canada Revenue Agency, it took him to an official looking website that asked for some personal information. “I don’t know whether I had a short circuit between the earlobes or something,” said Day. “But, I went into this darn site and it had you type in your social insurance number to get into the site.”
If someone with such experience can fall for it, everyone should be doubly cautious when they receive e-mail messages that appear to come from the Canada Revenue Agency.
Today I received the following e-mail message, that purports to come from the Canada Revenue Agency. However unless some staff members at the CRA have inferior spelling skills, this should not fool too many people.
Worm Regards, indeed. It is so ludicrous that one wonders if it is a deliberate spoof. Nevertheless it can serve to warn all that more insidious e-mail scam messages from the Canada Revenue Agency are making the rounds. Remember the CRA will not be contacting you this way and nor will the security departments of your bank or your credit card company.
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The monthly newsletter from the Canadian Banking Association is out and is well worth reading. Unfortunately it does not appear on line so your only way of seeing it is to subscribe to the e-mail version.
The topic of Fraud Prevention Tip – February 2009 is scams. You may wish to subscribe to see the full content but here we will show you some of the highlights.
According to statistics compiled by PhoneBusters, in 2008 there were more than 17,000 victims of fraudulent scams in Canada, which added up to a total dollar loss of over $36 million. And as these numbers are based solely on reported cases, there are potentially countless more that have gone unreported.
With so many scams you might feel overwhelmed but the good news is there are many resources available for consumers to help them protect themselves. The newsletter gives the following:
The PhoneBusters website is excellent and has a particularly good list of current scams, which you can explore via the following links:
The newsletter also gives some useful links to credit card companies and the Interac Association, which runs the debit card system since frauds may often involve these. Here are the Visa, MasterCard and Interac fraud prevention web pages for both card holders and merchants.
Visa
MasterCard
Interac
Here are some other resources on scams in Canada you may find helpful.
Let us hope that all the above remains only a somewhat academic source of information for you and that you are never taken in by one of these scams. Some of these scams are very difficult to spot and can destroy your life so it is important to be ever vigilant.
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Unfortunately the headline from Philadelphia is that Local Seniors Fall Victim To ‘Grandparents Scam’.
Local police departments are warning senior citizens in the region about a phone scam preying on grandparents. The aptly named “Grandparents Scam” starts with a phone call placed in the middle of the night to a senior citizen. The scammers have been asking the seniors to wire the money using Western Union or Money Gram, services that make tracing the source very difficult.
Police warn that anyone who receives a phone call like this to take the time to verify the authenticity of the call by checking with others in the house or returning a call on a private line like a cell phone, before transferring money.
ConsumerAffairs.com exposed this scam back in November 2006. A special report by the syndicated TV news program “Inside Edition” found that con artists were scamming seniors out of hundreds and even thousands of dollars by posing as their grandchildren. It was one of their list of Top 10 Scams of 2006.
In these more troubling economic times, it is important to be even more vigilant so as not to be taken by scams such as this.
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If you think that senior investment scams would describe seniors who had been taken in by investment scams, then think again. In this case it was a senior who took a large number of other people for a great deal of money.
The story of this appears in the Seniors World Chronicle, which is a Daily Digest of International News About Aging. The headline was: JAPAN: 75-year old arrested over $1.4-bn investment scam.
Japanese police arrested Kazutsugi Nami, 75, chairman of now bankrupt bedding supplier L&G K.K., who built a cult-like status among thousands of investors whom he reportedly defrauded of at least $1.4 billion. He had promised 36 percent annual returns. His company even issued its own electronic money, which he predicted would be a hit during the global economic crisis.
Many of the victims were elderly people, who initially bought everything from vegetables to futons with the currency and would attend promotional fairs set up by the 75-year-old Nami. Nami swindled 37,000 investors out of a total of 126 billion yen (1.4 billion dollars), the Jiji Press news agency and public broadcaster NHK said, quoting investigation sources.
Nami’s company introduced its own electronic money, which was fed into investors’ cellphones and used to buy items including food, jewelry and clothes at bazaars and online shops. The money was called “enten”, apparently a combination of the Japanese words for the yen currency and paradise. People who put up cash one time for the company got the same sum of enten in exchange every year, making them feel that their money would never disappear even if they spent it.
As usual if it looks too good to be true, then it probably is to be avoided. Do not assume that older people are any more or any less to be trusted than people of any other age. That’s been an expensive lesson for all those Japanese investors.
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