Fraud happens in many different and ingenious ways.
It’s through cyberattacks on our computers and emails, through our bank accounts and our cell phones. No one is immune from being targeted and it’s only going to get worse.
“People are, for the most part, getting away with it and it’s profitable, so why should people stop?” asks Const. Dustin Classen, a member of the economic and technical crime unit of the Delta Police Department.
“Most people probably don’t hear the extent of it. Delta has 100,000 people and once a week there is a fraud reported in your Crime Beat that you guys are aware of, but how many go unreported or how many attempts are there?”
He says people need to be aware of the warning signs so if an attempt is made by a scammer, they’re prepared to deal with it.
Classen says there are many common ones that consistently pop up on the radar of DPD investigators, including the omnipresent Canadian Revenue Agency (CRA) scam.
“It’s always prevalent. There are a lot of people who are not aware of our tax system or have just moved to Canada or haven’t taken the time to understand a very complex system, so there are a lot of potential victims out there that will get scammed by it,” he says. “CRA will never ask for money or ask for money through Bitcoin or gift cards.”
One of the bigger scams that’s likely underreported, according to Classen, involves pyramid schemes.
A pyramid scheme is an arrangement in which participants recruit others with returns given to early participants using money contributed by later ones. They only make money by recruiting more participants.
Classen says the scheme has been called “Women helping Women” and “Pay it forward” and referred to as “The Cloud’ or “Gifting Circle.”
Payment is strictly in cash and referred to as a gift. Participants are often required or encouraged to use an alias. Those involved are often recruited by friends, family or co-workers and presenters often claim they’ve checked with authorities who have confirmed it’s legal, even though it’s not.
“Lots of people have a false understanding of how these work and we have to correct that in people,” Classen says. “There are a ton of victims – a lot of people don’t get money – and also the criminal justice system moves slowly, so even if you see an arrest and a suspect is out on bail, it is still illegal because he will be going to court and he will be going to jail. This is not a victimless crime.
“We are not immune to any of these because we are sleepy Delta,” says Classen. “In the case of pyramid schemes, they flow between populations and hopscotch through many jurisdictions across the Lower Mainland, which can make them complicated files to investigate.”
Business email compromise is another big one hurting companies in Delta. This happens when a fraudster convinces a business to send a large sum of money to a third party account.
The fraudster impersonates business staff by compromising or spoofing their email and then directs accounting staff or clients of the business to send large wire transfers.
Recent Delta investigations
- In September 2017, an accountant for a Delta business received an email request from her boss to transfer $190,000 to a Hong Kong business account. The accountant made the transfer, but then realized her boss’ email was spoofed. The conclusion: the wire transfer was recalled.
- In November 2017, suspects gained access to a local company’s email service, began impersonating the accountant and made contact with a company client, providing it with a new deposit account. The client then wired $40,000 to the suspect’s account. The conclusion: the $40,000 was transferred overseas and not recovered.
- In February 2018, a local business had its email either compromised or spoofed, with fraudsters redirecting a $25,000 payment from a client. The conclusion: the money was not recovered.
How to protect your business
- Be wary of unexpected emails requesting urgent wire transfers or account changes
- Look closely at the email address
- Watch out for suddenly poor or awkward English in emails
- For any payment account changes, require a two-step verification (email and confirm by phone to a known phone number)
- Consider implementing security tokens
- Limit your personal and business information you post online (fraudsters research)
- Maintain your computer systems (anti-virus and other software updated) and have them periodically reviewed by IT specialists.
Always report the scam to authorities
“You have to get past the shame if you have been a victim and targeted,” says Classen. “We can’t investigate if we don’t know about it. I think it’s estimated about maybe five per cent of fraud victims actually report.
“If you have had your debt card skimmed and your account has been accessed, how many people report that to the police? I bet hardly any. The point is a lot of people don’t even think about reporting to police. They go to the bank, get their money back and problem solved. Well, if we don’t find out about these things, we can’t figure out who is doing it and the scams and frauds just grow and grow.”
What the experts say
Tsawwassen’s Craig Morrison is a director at a multi-national computer systems firm and has a long background in dealing with viruses and computer crime, which is a common way hackers gain access to your vital personal information.
“Scammers buy ads, misleading sites that look like real computer service companies or domains that are very close to the real ones with the goal of re-directing the victim to give up access to their computer,” says Morrison. “The scammer will then sell ‘service.’ Even worse, sometimes they will lock the user’s computer and demand ransom to get back into their computer. They will also rifle through files looking for passwords and any sort of financial or banking info they can use to outright steal.”
The takeaway here, says Morrison, is that no one should ever let anyone they don’t know access their computer remotely.
“If you think you have a virus of some sort, call a known provider like Best Buy or Delta Geeks,” he says. “Install an antivirus like Norton and if your computer has been locked or similar, it usually can be saved by an expert. Don’t pay.”
Tsawwassen’s Neville Le Page has recently retired as a financial crime investigator for American Express. He worked for the past 20 years in the field and prior to that was with the RCMP where for two decades he specialized in financial crime investigations.
One of the frauds that came up regularly in his last few years with the banks was the gift card scam.
“The reason it came to the banks’ attention was that people would use their credit cards to buy gift cards and then the information is then supplied to somebody and the customer would be on the hook for the purchase,” says Le Page.
“The other one was the CRA (Canadian Revenue Agency) scam and another one was someone would get an email supposedly from their boss asking them to buy gift cards and the result was always the same – someone used their credit card to buy gift cards and then was on the hook for the purchase.”
Le Page says an ounce of prevention is definitely worth it.
“If you receive unsolicited pressure, say from CRA, or an offer perhaps from a company you are not dealing with, then check it out. A quick Google query will let you know pretty quickly that something is wrong.
“It could also be phoning the Delta police, who are a great police force by the way. Tell them you received this call and you think it might be a scam and they can say this is what you should or should not do. Fraud is not reported as often as it happens. When people are a victim of this they might feel embarrassed and think the police can’t do anything about this, but the police can be a very effective resource when it comes to combatting fraud, but they have to know about it.”
Le Page says another tip is to ensure all financial documents, like credit card statements, are received electronically versus through Canada Post.
“My apartment in Tsawwassen was hit and the mailboxes were broken into, so electronic correspondence is not as vulnerable as hard copy mail correspondence. Everyone should also shred their personal documents before recycling them.”