The Little Black Book of Scams PDF

Competition Bureau Bureau de la concurrence Canada Canada THE LITTLE BLACK BOOK OF SCAMS THE LITTLE BLACK BOOK OF SCAMS 2ND EDITION First published by the Competition Bureau Canada 2012 This pu...

Competition Bureau Bureau de la concurrence Canada Canada THE LITTLE BLACK BOOK OF SCAMS THE LITTLE BLACK BOOK OF SCAMS 2ND EDITION First published by the Competition Bureau Canada 2012 This publication is not a legal document. It is intended to provide general information and is provided for convenience. For information on the Competition Bureau’s activities, please contact: Information Centre Competition Bureau 50 Victoria Street Gatineau QC K1A 0C9 Tel.: 819-997-4282 Toll free: 1-800-348-5358 TTY (for hearing impaired): 1-866-694-8389 Fax: 819-997-0324 Website: www.competitionbureau.gc.ca To obtain a copy of this publication, or to receive it in an alternate format (Braille, large print, etc.) please contact the Competition Bureau’s Information Centre at the numbers listed above. This publication is also available online in HTML at: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04333.html Permission to reproduce Except as otherwise specifically noted, the information in this publication may be reproduced, in part or in whole and by any means, without charge or further permission from the Competition Bureau provided due diligence is exercised in ensuring the accuracy of the information reproduced; that the Competition Bureau is identified as the source institution; and that the reproduction is not represented as an official version of the information reproduced, nor as having been made in affiliation with, or with the endorsement of the Competition Bureau. For permission to reproduce the information in this publication for commercial redistribution, please Apply for Crown Copyright Clearance or write to: Communications and Marketing Branch Innovation, Science and Economic Development Canada C.D. Howe Building 235 Queen Street Ottawa, ON Canada K1A 0H5 Email: [email protected] © Her Majesty the Queen in Right of Canada, as represented by the Minister of Industry, 2018 Cat. No. Iu54-42/2018E-PDF ISBN: 978-0-660-24808-0 2019-03-29 This publication is available through PDF on the web in the following languages: French, Chinese simplified, Chinese traditional, Punjabi, Spanish, Tagalog. PREFACE Scammers are sneaky and sly. They can target anyone, from youngsters to retirees. They can also target businesses. No one is immune to fraud. Our group of superheroes has found a way to see through the scams. Their secret is simple: knowledge is power! Read on to find out how you can also become a fraud-fighting superhero. Share this booklet with family and friends and start powering up! TABLE OF CONTENTS Fraud fighting 101.................................................. 6 Tax scams........................................................ 14 Subscription traps................................................. 7 Door-to-door scams............................................... 15 Identity theft....................................................... 8 Emergency scams................................................ 16 CEO scams........................................................ 9 Purchase of merchandise scams................................... 17 Health and medical scams......................................... 10 Sale of merchandise scams........................................ 18 Romance scams................................................... 11 Red flags: things to watch for....................................... 19 Business scams................................................... 12 Reporting a scam................................................. 20 Phishing and smishing scams...................................... 13 FRAUD FIGHTING 101 Become a real-life superhero by arming yourself Learn to fight fraud. This booklet includes 12 of the most common scams currently targeting Canadians. It is filled with tips and tricks on with the information you need to fight fraud and how to protect yourself and what to do if you get scammed. keep yourself, your family and your money safe. Report it! Anyone can be targeted, from teenagers, to grandparents, You work hard for your money. You want to spend it on things that to senior corporate officers. The best thing you can do is to report the matter to you—whether it’s your children’s education, an exciting trip or a fraud, whatever the amount, to the appropriate authorities. Don’t be new smartphone. embarrassed as it will help others from falling for it. Fraudsters are real. They are out there every day looking for victims. Knowledge is your power. Protect yourself by seeking out more They will target you online, over the phone, by mail or in person. information. In addition to this booklet, you can also consult numerous You’re a target. Thousands of Canadians lose millions of dollars to trusted websites for more information. fraudsters every year. The impact of fraud on families and businesses can The Canadian Anti-Fraud Centre, managed by the RCMP, the be devastating. Competition Bureau and the Ontario Provincial Police, has plenty of information on fraud. Power up today by visiting www.antifraudcentre.ca! page 6  Scammers use websites, emails, high-pressure sales tactics like a social media platforms and phones “limited time offer” are often used to reel people in. Remember, to rush you into making a decision. Tips to protect yourself: Trust your instincts. If it’s too good to be true, don’t sign up. Before you sign up for a free trial, research the company and read reviews, especially the negative ones. The Better Business Bureau is a great source of information. Don’t sign up if you can’t find or understand the terms and conditions. Pay special attention to pre-checked boxes, cancellation clauses, return policies, and any vague charges. If you go ahead with a free trial, keep all documents, receipts, emails, and text messages. SUBSCRIPTION TRAPS Regularly check your credit card statements for frequent or unknown charges. Good deals can bait you into falling for If you have trouble cancelling your subscription, contact your credit card provider, your local consumer expensive traps! protection organization, or law enforcement agencies. A subscription trap can trick you by Once you provide your credit card offering “free” or “low-cost” trials information to cover shipping costs, of products and services. Products you are unknowingly locked into a commonly offered are weight loss monthly subscription. Delivery and pills, health foods, pharmaceuticals billing can then be difficult, if not and anti-ageing products. almost impossible, to stop. If you suspect a scam, always report it. Go to pages 19 and 20 for more information. page 7  They look for credit card online usernames and passwords, information, bank account details, driver’s licence number, and full name and signature, date of passport number. birth, social insurance number, full Identity theft is a serious crime! address, mother’s maiden name, Tips to protect yourself: Never provide your personal information over the phone, via text message, email or the internet. Avoid public computers or Wi-Fi hotspots, such as in coffee shops, to access or provide personal information; they put you at risk. Create strong and unique passwords for each of your online accounts. Password-protect your devices and home Wi-Fi network. Use a secure and reputable payment service when buying online—look for a URL starting with “https” IDENTITY THEFT and a closed padlock symbol. Avoid giving out personal information on social media. Help ensure your identity remains yours alone! It can be used along with your pictures to commit fraud. Scammers are always on the Fraudsters use techniques that Always shield your PIN when using your card. If you lookout to collect or reproduce range from unsophisticated to hand it over to a cashier, never lose sight of it. your personal information to elaborate. Offline, they can go Shred and destroy documents with personal commit fraud. Thieves can make through trash bins or steal mail. information. purchases using your accounts, Online, they can use spyware and obtain passports, receive viruses, as well as hacking and government benefits, apply for phishing (see page 13). loans, and more. This could turn your life upside down. If you suspect a scam, always report it. Go to pages 19 and 20 for more information. page 8  contract, complete a confidential lucrative scam can cost businesses transaction, or update a supplier’s tens of thousands to millions payment information. of dollars. Fraudsters are usually strategic CEO scams are a growing about the timing of these emails. global threat that targets small They send them when executives local businesses and large are away or hard to reach. This corporations alike. Tips to protect yourself: Keep your computer systems secure with an up-to-date, reputable antivirus software and strong passwords. Validate all transfer requests either on the phone or in person. Never use the contact information provided in emails. Verify the sender’s email address—scammers will CEO SCAMS often create addresses that are very similar to legitimate ones, with just one or two different letters. Your CEO is asking for money urgently; make sure Encourage your company to create a standard the email is legitimate! process for money transfers that requires multiple levels of approvals. Do you work in accounting or access to their email address or Limit the details you share publicly. Fraudsters use finance? Do you have the authority by imitating one. They will send information that’s available online and on social media to move money at work? Do you realistic-looking emails that try to to find potential victims and to time their fraud. report to a chief executive officer trick you into wiring money to a (CEO)? If yes, be on the lookout; third party. this scam specifically targets you! The emails will make the request In a typical “CEO scam,” fraudsters sound urgent and confidential. For will impersonate a senior company example, they may say the money If you suspect a scam, always report it. executive, either by gaining is needed to secure an important Go to pages 19 and 20 for more information. page 9  revolutionary exercises; fat-busting prescription. They advertise on the devices; or breakthrough products, internet and send spam emails. such as pills, patches or creams. If you do receive the promised products, there is no guarantee they Fake online pharmacies offer are the real thing or safe to take. drugs and medications at very cheap prices or without a doctor’s Tips to protect yourself: Remember that there are no magic pills or miracle cures for achieving quick weight loss or treating medical conditions. Don’t trust claims about medicines, supplements or other treatments. Get the facts straight from your healthcare professional. HEALTH AND MEDICAL SCAMS Never commit to anything under pressure, especially if a large advance payment or long-term contract Watch out for magical cures that offer quick and is required. easy fixes. Know that if an online pharmacy is legitimate, it will require valid prescriptions. There are fraudsters out there who alternative medicines and hope to take advantage of people’s treatments that quickly and easily Be skeptical of celebrity endorsements or suffering. The three most common treat serious conditions. Some of testimonials. types of health scams are miracle these may seem to be endorsed cures, weight loss programs by celebrities or promoted by and fake online pharmacies. testimonials of people claiming to In all cases, they often appear as have been cured. sponsored posts on social media Weight loss scams promise or website pop-ups. dramatic results with little If you suspect a scam, always report it. Scammers offer products and to no effort. The scammers services that seem to be legitimate might promote unusual diets; Go to pages 19 and 20 for more information. page 10  A fraudster can also create a fake In many cases, the scammer may dating site where you pay for each even arrange to meet up with you message you send and receive. To in person to make their fraud seem keep you writing back and paying, more credible. the scammer may hook you in with vague emails about their love and desire for you. Tips to protect yourself: Never send money or give financial details on a dating site. Trust your instincts, ask questions and carefully read the terms and conditions before signing up. Know which services are free, which ones cost money and what it takes to cancel your account. ROMANCE SCAMS Make sure you only use legitimate and reputable dating sites. Always check website addresses Who is really behind the keyboard? carefully, as scammers often mimic real web addresses. Keep your guard up and look out themselves, or of someone they Remember that it’s very unlikely that someone will for potential scammers who will claim to be. Once you are charmed, declare their undying love to anyone after only a few try to lower your defences by they will start asking you to send letters, emails, phone calls or pictures. appealing to your romantic and money. They may claim to have compassionate side. They can prey a very sick family member or a on you on popular, legitimate dating desperate situation with which they sites as well as on fake ones. need your help. Once you give them money, they often disappear. On a real dating site, a scammer might send you a few messages If you suspect a scam, always report it. and a good-looking photo of Go to pages 19 and 20 for more information. page 11  training. In both cases, you may be In many cases, scammers will told to act quickly. hound you to pay the amount they claim you owe. They will even trick One other possible scam is the you into believing that they will office supply scam, which involves report you to a collection agency. you receiving and being charged for items you didn’t order. Tips to protect yourself: Educate yourself, your employees and your co- workers to be cautious of unsolicited calls. Create a list of companies that are typically used by your business. Limit the number of staff who can approve purchases and pay bills. BUSINESS SCAMS Clearly define procedures for verification, payment and management of accounts and invoices. Stay up to date on the schemes targeting Contact your province’s regulator to know your businesses! legal obligations. Organizations of any size can still pay the bill, unaware that your Fraudsters will use company names or logos similar be duped by clever frauds, so make company never actually ordered or to those of known businesses to make their invoices sure you know about them. authorized the service. seem real. Inspect invoices carefully before making any payments. A typical one is the directory Another common fraud is the scam. A fraudster sends your health and safety products scam. company a proposal for a listing You might receive a phone call from or advertisement in a magazine, someone claiming to be from the journal or business directory, or provincial government, telling you for an online directory. They’ll that your first-aid kits need to be If you suspect a scam, always report it. call to confirm the address and replaced or you have to update other details. Then the accounting your company’s health and safety Go to pages 19 and 20 for more information. department will receive and page 12  These messages often copy the action. They take many shapes and tone and logo of organizations you forms but the bottom line is that trust, and usually include a call to they seek your personal details. Tips to protect yourself: Know that reputable organizations will never ask for your personal information through email or text. Ignore communications from unknown contacts. Delete suspicious messages as they can carry viruses. Don’t reply to spam messages, even to unsubscribe, and don’t open any attachments or follow any links. To verify a hyperlink without clicking, hover your PHISHING AND SMISHING mouse over it. Carefully check if it is accurate. SCAMS Update your antivirus software on all devices. Never use the phone number or email address Be on the lookout. Messages are easily fabricated! provided in the suspicious message—use contact information listed on verified websites. As we spend more time online, agencies. Scammers ask you to fraudsters are getting more provide or verify, either via email or creative with scams in the by clicking on a web link, personal digital space. or financial information, like your credit card number, passwords and Phishing is when you get an social insurance number. unsolicited email that claims to be from a legitimate organization, Smishing is the same thing, except such as financial institutions, it occurs via text messages. If you suspect a scam, always report it. businesses or government Go to pages 19 and 20 for more information. page 13  In any case, if you do receive a call, check online via “My Account” or letter, email or text saying you owe call 1-800-959-8281. money to the CRA, you can double Tips to protect yourself: The CRA will never: use aggressive or threatening language. threaten you with arrest or send police. ask for payments via prepaid credit cards or gift cards, such as ITunes, Home Depot, etc. collect or distribute payments through Interac e-transfer. use text messages to communicate under any circumstances. Emails from the CRA: TAX SCAMS never ask for financial information. never provide financial information. Got a call or email from the CRA? Make sure The CRA’s accepted payment methods are: it’s real! online banking. You get a text message or an email Another variation is that they call debit card. from the Canada Revenue Agency you to say that you owe the CRA pre-authorized debit. (CRA) claiming you’re entitled to money and that you need to pay an extra refund and all you need to right away, or else they will report do is provide your banking details. you to the police. Watch out—this wonderful-if-true situation is exactly what a tax scam looks like. If you suspect a scam, always report it. Go to pages 19 and 20 for more information. page 14  of various appliances, like In others, the products or water heaters, furnaces and services are of poor quality or not air conditioners. as represented. In many cases, you’ll never receive the product or service promised. Tips to protect yourself: Don’t feel pressured to make a quick decision—take time to do some research on the seller and the products first. Ask for photo ID, get the name of the person and of the company or charity they represent. Ask for the charity’s breakdown of where funds are allocated. Be sure to get this in writing. Never share any personal information or copies of any bills or financial statements. Only allow access to your property to people you trust. DOOR-TO-DOOR SCAMS Research before you invest. Don’t sign anything and always read the fine print. Knock, knock! Who’s there? A scammer! Know your rights. Contact your local consumer Despite living in the digital age, product or sign up for a service you affairs office—most provinces and territories have guidelines under their consumer protection act. there are still some old fashioned don’t want or need. scams that come right to your These aggressive pitches are door, posing a threat to you and to often for charitable donations, businesses. With this trick, door-to- investment opportunities or door salespeople use high-pressure home services and maintenance tactics to convince you to buy a If you suspect a scam, always report it. Go to pages 19 and 20 for more information. page 15  One variation of this ploy features In other cases, the scammer will two people on the phone, one pretend to be an old neighbour or a pretending to be a grandchild and family friend in trouble. the other a police officer or lawyer. Tips to protect yourself: Take time to verify the story. Scammers are counting on you wanting to quickly help your loved one in an emergency. Call the child’s parents or friends to find out about their whereabouts. Ask the person on the phone questions that only EMERGENCY SCAMS your loved one would be able to answer and verify their identity before taking steps to help. Caring grandparents, don’t act too quickly! Never send money to anyone you don’t know and trust. Emergency frauds usually target getting locked up in jail, or Never give out any personal information to loving grandparents, taking trouble returning home from a the caller. advantage of their emotions to rob foreign country—and they need them of their money. money immediately. The typical scam starts with a The caller will ask you questions, grandparent receiving a phone getting you to reveal personal call from someone claiming to be information. They’ll also swear their grandchild. The “grandchild” you to secrecy, saying they are goes on to say they’re in trouble— embarrassed and don’t want common misfortunes include other family members to find out If you suspect a scam, always report it. having been in a car accident, what’s happened. Go to pages 19 and 20 for more information. page 16  In other instances, fraudsters will lure If a site or offer stands out you into clicking on sponsored links dramatically from the rest, there’s that will direct you to a seemingly likely something off. genuine website. If you decide to buy from there, you won’t benefit from any protection or services that legitimate websites offer. Tips to protect yourself: Buy from companies or individuals you know by reputation or from past experience. Never make a deal outside the auction site. Beware of sellers from far away or that have limited or no reviews. Use a credit card when shopping online; many offer PURCHASE OF protection and may give you a refund. Be wary of websites that contain spelling mistakes MERCHANDISE SCAMS and grammatical errors. Read the refund and return policies carefully, Not all online vendors are reputable! including the fine print. Online shopping is a favourite like Kijiji or Craigslist. They will Ask the supplier questions and confirm service pastime for many consumers. But advertise their products at very low delivery timelines and the total cost. many deals you see online—from prices, enticing you to buy them. inexpensive designer purses to At the end of the day, if you do get significantly discounted electronic something, it might be of poor goods—are too good to be true. quality or a bad imitation of what Fraudsters can create accounts on you expected. legitimate auction sites, such as If you suspect a scam, always report it. eBay, or on an online marketplace, Go to pages 19 and 20 for more information. page 17  In other cases, you might get account. You’ll be asked to pay a paid with a fake money transfer, fee to obtain a business account a fraudulent cheque or a stolen to complete the transaction. The credit card. scammer offers to pay the fee if you reimburse them using a transfer or In another version, the scammer wire service. If you agree, the “fee” may send you a message that says money will go to the con artist. the payment can’t be sent due to a problem with your PayPal or bank Tips to protect yourself: Always meet in a local, public and safe place to complete an exchange. Beware of generic emails with bad grammar. Beware of far away buyers who want to buy products SALE OF or other items without seeing them. MERCHANDISE SCAMS Verify the sender’s email address—scammers will often create addresses that are very similar to Scammers can pose as buyers. legitimate ones, with just one or two different letters. Never send money to get money. If you sell items online, either email money notification that personally or as part of a business, claims the payment is pending. you need to be careful who you The catch is, the notification will say sell to as there is a risk of being the payment will only be released targeted by tricksters who want when you provide a tracking to take your merchandise, money, number for the goods. By the time or both. you enter the tracking number, In one version, the fraudster will you’ll have already shipped the If you suspect a scam, always report it. agree to buy your item without merchandise only to learn that the Go to pages 19 and 20 for more information. seeing it. You’ll get a PayPal or payment notification was a fake. page 18 RED FLAGS: THINGS TO WATCH FOR Learn to recognize the signs that something is amiss. Wire transfer. Many scams involve a request to wire money electronically Unsolicited calls. You might get a call from someone claiming that using a money transfer service, like MoneyGram and Western Union, or you have a virus on your computer, you owe taxes or there has been using cryptocurrency, such as Bitcoin. Remember that sending a transfer fraudulent activity in your bank accounts. Know that legitimate through these services is like sending cash—once the amount is picked organizations will not call you directly. Hang up and call the organization up, it’s almost impossible to get your money back. yourself using the number from a trustworthy source, such as the phone book, their website, or even invoices and account statements. Overpayment. When you’re selling something—especially online— be wary of how you get paid. A fraudster may send you a counterfeit Unsolicited friend requests on social media. Don’t accept friend cashier’s, personal or corporate cheque in an amount in excess of what requests from people you don’t know until you review their profile or they owe. You’ll be asked to deposit the cheque and wire the excess ask your real-life friends if they know them. Does their profile look fairly funds immediately back to them. Once your bank realizes the cheque is a empty or have posts that are very generic? Do they seem to be promising fake, you’ll be on the hook for the money withdrawn. more than friendship? These are some red flags that point to a scam. Delete that request and block future ones. Spelling mistakes. Be skeptical of emails, messages or websites that contain misspelled common words; grammar errors that make it Astounding mail offers. You received a game card in the mail. It difficult to read or expressions that are used incorrectly. Email and web guarantees you will or have already won. Prizes might range from cars addresses should also be examined closely to see if there are subtle to trips. If you have not entered a contest, throw that card away. It’s mistakes or differences. probably a scam! Personal information request. Fraudsters may ask potential victims to It’s just too good to be true. Everybody loves a great deal. But shocking provide more personal or financial information than is required for the offers, unbelievable discounts and unreal rates may signal that the offer transaction or discussion. Be suspicious if someone asks for copies of isn’t quite what it seems. Cheap prices usually equal cheap products, or your passport, driver’s licence and social insurance number, or birth date, counterfeit goods. Free offers may require providing your credit card for especially if you don’t know the requestor. shipping. Small tactics like these can lead to big profits for scammers. page 19 REPORTING A SCAM Who to contact depends on where you live and Investment scams involve share buying, foreign currency what type of scam is involved. trading, offshore investments, Ponzi schemes, or prime bank investment schemes. Whether you’ve been scammed or targeted by a fraudster, you should You can report financial and investment scams to the Canadian always report it. Canadian authorities may not always be able to take Securities Administrators or your local securities regulator. action against scams, but there are ways you can help. By reporting the scam, authorities may be able to warn other people and alert the media www.securities-administrators.ca to minimize the chances of the scam spreading further. You should also warn your friends and family of any scams you come across. Banking and credit card scams Here is some advice on where to report, depending on the type of scam: Contact your bank or financial institution In addition to reporting these scams to the Canadian Anti Fraud Centre, Canadian Anti-Fraud Centre Competition Bureau you should alert your bank or financial institution about any suspicious www.antifraudcentre.ca www.competitionbureau.gc.ca correspondence that you receive regarding your account. They can 1 888 495 8501 1 800 348 5358 advise you on what to do next. Local scams When contacting your bank or financial institution, make sure to use the telephone number found in the phone book, on your account statement Contact your local consumer affairs office or on the back of your card. Your local consumer affairs office is the best resource for investigating Spam emails and text messages scams that appear to come from within your own province or territory. A list of provincial and territorial consumer affairs offices can be found in Contact the Spam Reporting Centre the Canadian Consumer Handbook. Many scams arrive by email and text message. Visit www.fightspam.gc.ca www.consumerhandbook.ca for information on Canada’s anti spam legislation and how to report spam. Financial and investment scams Fraudulent, phishing or smishing messages requesting personal details can also be reported to the bank, financial institution or other concerned Contact Canadian Securities Administrators organization. Again, be sure to use a phone number or email address that is listed in an official reputable source, and not the one that appears in Financial scams involve sales offers or promotions about financial the email. products and services, such as superannuation, managed funds, financial advice, insurance, or credit or deposit accounts. page 20 Fraud, theft and other crimes Additional organizations to contact depending on Contact the police the situation: Your provincial Better Business Bureau Many scams that may breach consumer protection laws (those enforced by the Competition Bureau and other government and law enforcement Canada Revenue Agency—Charities Inquiries Line agencies) may also breach the fraud provisions of the Criminal Code. www.cra-arc.gc.ca If you are the victim of fraud—meaning you have suffered a loss because 1 800 267 2384 of someone’s dishonesty or deception—consider contacting your local police, especially if the amount involved is significant. You should Your provincial records office definitely contact the police if your property has been stolen or you’ve Credit bureaus can put a fraud alert on your account, which will alert been threatened or assaulted by a scammer. lenders and creditors of potential fraud: Identity theft Equifax Canada 1-800-465-7166 Contact the police TransUnion Canada Identity theft refers to the acquisition and collection of someone else’s 1-866-525-0262 personal information for criminal purposes. The Little Black Book of Scams is available online at If you suspect or know that you are a victim of identity theft or fraud, or if www.competitionbureau.gc.ca you unwittingly provided personal or financial information, you should: Contact your local police force and file a report. Contact your bank or financial institution and credit card company Contact the two national credit bureaus and place a fraud alert on your credit reports. Always report identity theft and fraud. Contact the Canadian Anti- Fraud Centre page 21 Knowledge is power!