March is fraud prevention month in Canada (Image: Competition Bureau website)

March is once again “Fraud Prevention Month” in Canada, and the Competition Bureau and partner law enforcement agencies want to send the message to report and stop fraud across the country.

The focus this year will target online frauds.  This is a wide category, and can encompass everything from emails “phishing” for personal information such as banking account or access numbers and passwords, to “spoof” websites designed to elicit personal information or bogus web payments, to spam emails promoting stock market “pump and dump” schemes and other types of digital-age scams.

This year, there is also a first-ever fraud awareness conference to be held in Ottawa, organized by law enforcement, government and private sector bodies.

The Competition Bureau lists five of the most common scams presently circulating, online or offline, including business supplies and directory scams,work-at-home  job scams, fraudulent drugs and medicines, lottery prize scams, and money transfer scams.

The so-called “directory” scams target businesses with bills for overpriced advertising listings in business phone directories mimicking the Yellow Pages® and other legitimate directories.  In some cases, the directories really exist, so an actual “product” is being sold.  But the scammer overstate the circulation and prominence of the directory, as well as the listing price.  In many cases, they rely on the targeted businesses to mistake the invoices for the more well-known, trademarked directories, and make a payment without adequate controls or checks.

In work-at-home scams, often perpetrated online, the fraudsters collect readily available free information, for example, about Google advertising programs, and sell it to unsuspecting consumers through an overpriced CD-ROM product.  Although some offer a money-back guarantee, the product often includes a monthly subscription fee billed to a credit card, which can be difficult to reverse or cancel, because the scammers insist that the CD-ROM be returned before cancellation, which can take days – by that time the consumer has already been billed.

Canada is also one of the leading countries hosting bogus online pharmacies, and many spam emails advertise these obvious blights.  The pharmacies exist only online, in most cases, and it is often difficult to verify whether there is an actual company or legitimate business operating them.  The drugs sold online are often illegal or grey-market, and very often are counterfeit.  In some cases, no product is ever sent, but the fraudsters collect the money, never refund it, and cannot be found afterwards.  The websites go up and then down in a matter of days, only to return again under a new name and web address.

Lottery scams are particularly hard on seniors and the poor, who are often fooled into making ever-increasing payments for various taxes, fees, legal charges, and other made up charges before having any prize winnings released.  This fraud ends when the victim stops paying.  For fraudster’s goal is to have them paying for as long as possible, for as many made up charges and fees as possible.

Finally, with money transfer scams, the victim is often asked to receive a payment into their account, and then send one out to another party, usually after keeping a small amount for themselves as their fee.  The initial deposit is then discovered to be fraudulent, and the victim’s bank reverses the deposit.  By then, the victim has already transferred the payment to the third party, meaning they are out of pocket for that amount.