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Scams to Watch For
Internet Fraud
The Internet continues to be the hottest medium for almost every scam. It provides opportunities for legitimate businesses and consumers, but it also hosts fraud artists running investment scams, fake business opportunities and fraudulent auctions, among others.

The Internet has spawned online scams and jargon to describe them as well: “phishing” and “spoofing” for example.

“Phishing” is a term coined by computer hackers, who use email to fish the Internet hoping to hook you into giving them your logins, passwords and/or credit card information. The phisher sends an email impersonating a legitimate company (called “spoofing”) such as your own Internet service provider or financial institution. The email then directs you to a bogus site to update your account information.

Spyware is another Internet threat: software that covertly gathers user information, such as passwords and credit card numbers, through the user’s Internet connection without his or her knowledge. Check out web businesses just as carefully as you would any other business. Always check out the security and privacy policies of websites and above all, treat all unsolicited email as bogus and delete it. Increasingly, companies are using third party security “seals” such as the BBB OnLine Reliability Seal to reassure consumers of their online security. Be sure to click on the seal to confirm that it is valid and that the company is officially subscribed rather than having just cut and pasted an unauthorized logo onto their website.

The Business Practices and Consumer Protection Authority administers consumer protection legislation that protects consumers making online purchases and sets parameters for distance sales contracts. Contact the BPCPA at www.bpcpa.ca or toll-free 1-888-564-9963.

Identity Theft
Identity theft is the fastest growing type of fraud in North America; consumers and businesses lose billions annually. In fact, according to Project Phonebusters, between January 1 and November 30, 2004, Canada had a total of 9,985 reported victims of identity theft.

ID thieves can, and do, use all sorts of tactics to take your personal information: looking through your garbage or recycling box, pretending you need to provide such information in order to claim a prize or lottery winning, stealing your mail, placing bogus newspaper ads for jobs locally and internationally, sending unsolicited emails posing as your financial institution, etc.

At least annually, order a copy of your credit history from both credit bureaus: Equifax (www.equifax.ca or toll-free 1-800-465-7166) and TransUnion Canada (www.tuc.ca or toll-free 1-866-525-0262) and check your credit reports for accuracy. If a fraudster has applied for credit in your name, the report will likely reflect this.

For more information, go to Buyer’s Tips on “Identity Theft” at
www.bbbvan.org.
 
Overpayment Scams - Do not ever agree to refund any money for overpayment.
“Check overpayment” scams target consumers selling cars, renting homes or other valuable items through classified ads or online auction sites. Unsuspecting sellers get stuck with a big loss when scammers pass off bogus cashier’s checks, corporate checks, or personal checks. The Federal Trade Commission has issued a new consumer alert, “Check Overpayment Scams: Seller Beware,” that explains this scam and offers consumers tips on how to protect themselves and their pocketbooks.

A check overpayment scam begins when a scam artist replies to the classified ad or auction posting and offers to purchase the item for sale with a check, then comes up with a reason for writing the check for more than the purchase price for the item. The scammer asks the consumer to wire back the difference after the check is deposited. Later, the scammer’s check bounces, leaving the consumer liable for the entire amount. The scam is able to progress because, though the checks are counterfeit, they may look good enough to fool bank tellers.

The following tips are to avoid check overpayment scams:

  • Know who you are dealing with – independently confirm your buyer’s name, street address, and telephone number.
  • Never accept a check for more than your selling price.
  • Never agree to wire back funds to a buyer – a legitimate buyer will not pressure you to do so, and you have limited recourse if there is a problem with a wire transfer.
  • Resist pressure to “act now.” If the buyer’s offer is good now, it should be good when the check clears.
  • If you accept payment by check, ask for a check drawn on a local bank or a bank with a local branch. You can visit that bank branch to determine if the check is legitimate.
  • Consider an alternative method of payment, such as an escrow service or online payment service. If the buyer wants to use a service you have not heard of, be sure to check it out to be sure it is reliable – check its Web site, call its customer service hotline, and read its terms of agreement and privacy policy. If you do not feel comfortable with the service, do not use it.

Nigerian Frauds / Overpayment Scam
A classic "get rich quick" ploy, this scheme has been perpetrated worldwide and frequently targets small businesses, churches, and other non-profit organizations.

It starts with a letter, fax or email from Nigeria marked "urgent" or "confidential." The sender claims to be an official of a company or government ministry who is trying to transfer millions of dollars out of the country. The letter writer proposes depositing the money in a trustworthy bank account - yours - in exchange for 30 per cent or more of the transferred funds. To get in on the action, the business, consumer, or organization must provide its bank account number and other company information. When that information is provided, the business or individual is then pressured to start sending large sums of money to cover the transfer of funds, the payment of taxes or the bribing of Nigerian officials.

Of course, the millions of dollars claimed to be in Nigeria do not exist, and victims eventually end up with not hing but loss.

In a new twist, called the Overpayment Scam, the consumer who is selling goods online is cheated. This occurs when the consumer (the seller) receives a counterfeit cashier’s cheque from the supposed purchaser. The amount of the cheque is in excess of what is owed: the seller is then asked to deposit the cheque and wire the balance of excess funds immediately back to the sender/purchaser. The deposited cashier’s cheque is subsequently returned as counterfeit and charged back to the seller’s account.

Internet Work-at-Home Scams / Bogus Employment Services
Job seekers and other Canadians looking for extra income are vulnerable to scams promoting work-at-home schemes, envelope stuffing and be-your-own-boss offers. Other schemes guarantee access to the "unadvertised job market" in Canada, or abroad, for a fee. Some may even be illegal pyramid selling schemes designed to enrich only the plan's originators. Watch for unreasonable claims of weekly earnings, non-disclosure of the earnings of typical participants, hefty upfront fees or large inventory purchase requirements with vague return policies. Seminars, classified ads and email
are important ways that the under-employed are fraudulently enticed to fulfill their dreams of financial independence.

Unsolicited Email and Mail
Consumers have complained about the rivers of unsolicited mail and faxes that flow to their doors and fax machines. Thanks to the electronic age,they are receiving junk emails (spam) as well. To avoid spam, make sure that you read a website’s privacy notice before giving out your email address.
Exercise any blocking tools that might be offered by your Internet Service Provider (ISP) and email service. Consider setting up two email accounts (for public and private use respectively). Use discretion when making public posts on the Internet that divulge your email address. To help eliminate
spam, register your email address on the Direct Marketing Association’s website: www.e-mps.org.

To stop receiving un-addressed ad mail, notify Canada Post by placing a written notice where you receive mail requesting that no further junk mail be delivered to your address. To stop receiving addressed ad mail, contact the Canadian Marketing Association at 1-800-267-8805 or www.the-cma.org and request that your name be removed from the telephone calling and mailing lists of member companies.

If you are receiving unsolicited faxes, look for the sender’s return address. The Canadian Radio-Television and Telecommunications Commission regulations require it to be included so that the recipient can ask not to be contacted again. Such a request must be honoured within seven days and
should remain active for three years. If you are getting anonymous calls or faxes, contact Telus customer service at 604-310-2255. Business customers may call 604-310-3100.

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