Goldhawk Fights Back: Fraud Still Big Business in Canada

This is a weekly column by Dale Goldhawk, Canada’s best-known consumer advocate. A journalist, author and broadcaster, Dale hosts Goldhawk Fights Back For You, on AM 740 or at AM740 ZoomerRadio, Monday through Friday from 11 am to 1 pm, in the eastern time zone. Visit his website at www.goldhawk.com.

At the end of Fraud Awareness Month, it is important to remember that there is seldom anything totally new in the world of fraud. Almost all of the crooked pitches have been pitched for many years. They get re-written, freshened-up and modernized from time to time but they remain the same old cons that have worked ever since I wore short pants to school.

Canada’s Commissioner of Competition, Melanie Aitken, is warning us all that the Internet, the modern wild west of the marketplace is also a “fertile breeding ground” for con artists. I’d compare it more to a landfill site, a garbage dump of dishonesty.

Do not make any new friends on the Internet. If you do not know the person or the company in the real world — don’t trust the Internet world to introduce you to all the right people.

Too many people still scoff at the possibility of being conned. They can’t believe anybody could fall for some of the routines. But the cons are being delivered by pros. They do this for a living. They are smart and very good at what they do.

The Competition Bureau has released three modified letters of complaint from mere mortals who were conned, to give you an idea of how well, how easily the cons worked. With apologies to the Bureau, I have edited the letters for clarity (based on my 42 years of fraud-fighting in Canada) to help you better understand how these cons work.

What a nice little charity

“I would like to file a complaint concerning XXXXXX, which claimed to be a Toronto-based registered charity raising funds for books and school supplies for low-income families.

A few months ago, I received a phone call around dinner time from a nice young woman with XXXXXX, who told me all about the program and then asked if I would like to give a donation. She also insisted that no donation is too small. She explained that I could make a monthly contribution, or give a lump sum payment, which would help the charity keep administration fees at a minimum. In a few days, I would receive a receipt for income tax purposes and some literature highlighting all the good work that XXXXXX does in the Toronto area.

I did not need to pause for too long before agreeing that it would be nice to help someone else out. I’m a mother of two small children and I know how expensive it is these days to buy school supplies and other necessities.

After a few days, I checked my credit card statement and noticed that the donation had gone through. Two weeks later, I still had not received any information or tax receipt so I decided to go to their web site. There didn’t appear to be any Toronto-based charity matching the one I had just given $100 to. I tried calling the number stored on my phone’s caller list several times, but I kept getting the same message, ‘The caller you are trying to reach is unavailable. Please try again later.’ I then followed up with a search of charitable organizations registered with Canada Revenue Agency, only to discover that XXXXXX is not on the list.

I contacted my credit card company. Unfortunately I approved the transaction, so there was nothing they could do, except make a note of the organization as a fraudulent one.

Turns out being scammed by these guys wasn’t enough. I began to receive an unbelievably high number of calls from other charities, claiming to be fundraising for AIDS patients, hurricane victims and breast cancer research. I called the police, only to discover that my phone number has most likely been placed on a “sucker list,” which is apparently used by deceptive telemarketers to harass those who they believe are gullible enough to fall for another scam.

No one truly knows the financial loss caused by scam artists capitalizing on disasters and the unfortunate situation people may find themselves in. I don’t expect I’ll ever see my $100 again, but thought it was important to tell you about this scam, so you can inform the public and help protect them from losing their money too.”

Easy Money

“I’m writing to inform you of a scam that I unfortunately fell victim to. I write because I want others to know how easy it is to fall prey to these con artists. Please know that it’s really hard for me to write about this as I never thought I would be the naive and susceptible victim I always read about in papers. But I guess the statistics are right; it really doesn’t matter how much education you have, because in a pinch you’ll do anything to get your hands on more money.

About eight months ago, I applied to my local bank for a loan. I was denied because I had multiple credit cards, some of which were maxed out, and no savings. Then one day, I saw an ad online for a loan company that helps out new and start up businesses. I filled in the application and sent it through.

A few days later I got a letter from the company stating that I am an ideal borrower with a good prospect, and that I will be eligible for a loan. But, I would have to send in two cheques each in the sum of $750 to prove that I was serious about the offer, and that I will be getting into the habit of making regular payments eventually. That sounded like a reasonable request to me, and it made me believe the company was looking out for its financial security as well as mine.

I sent the first cheque as requested and received a letter of acknowledgment from the company indicating that the funds would be transferred into my account as soon as the second cheque cleared. I sent the second cheque shortly waited patiently for my loan to come through.

Two weeks later, I called the company only to discover that the number was disconnected. I tried it again and again to no avail. I mailed several letters to the company with each letter coming back as a ‘return to sender’.

I went to the police, but there was hardly anything they could do. They said this was clearly a scam and I was the typical target. I had to hide this from my family, because I was sure they would ridicule me for being so gullible. I contacted my bank and had to close my accounts, transfer my credit cards and go through a lot of work to make sure that whoever had cashed my cheques didn’t have any more ways to steal from me.

I was looking to generate some side income, live a little more freely and eventually start pursuing my own aspirations. What I ended up with was crushed dreams, a deficit of $1,500 and a nagging sense of embarrassment.”

Fly me to the moon

“I would like to bring the company XXXXXX to your attention and report them as a scam.

Last November, I received a brochure in the mail with holiday offers to go to Florida or Mexico, for 50% off coupon if I get someone else to go with me. I called the customer service number on the back of the brochure talked to a really nice sales agent. I gave her the coupon number and she said I was definitely eligible to go with six of my friends at a discounted price. I was so excited, and told her I would need to call all my friends to discuss it and finalize dates. The sales agent said unfortunately the coupon was a one-time offer, so I texted my friends right away. They all thought the price was great, and so we agreed on a date. The agent asked for my credit card number for a deposit of $300 per person.

A few weeks later I received my package in the mail and was really excited to get the tickets. But when I opened up the envelope, all that was in it was a contract telling me I’ve made a deposit on six locations in Mexico, but the dates we had requested were not available.

I was given several options to pick from, but all of them were much higher than the price quoted originally. The contract also said that since I’ve made the deposit and verbally agreed to the conditions, I was required by law to either complete the transaction or lose the deposit if I don’t go through with it.

I’ve never been in any legal trouble, defaulted on any bill payment and I didn’t want to have a bad credit record if this company came after me. It sounded like they had all the evidence needed to show that I agreed to these vacations and there was no way out.

I didn’t want to tell my friends that we had been scammed, so I decided to tell them that the dates we requested not available. Since it was my fault they got involved in this scam, I decided to keep the secret to myself and secretly lose all the money on the deposit. At $300 a person, I’m quite confident that I won’t be taking any vacations any time soon.

Several months later, I did some research and found out that this was a pretty popular scam with lots of victims falling for it almost every day. I learned about several different options when dealing with these types of companies, but the best thing I could have done was to just toss the initial brochure. I wish I knew that when I first picked up the phone to call them.”

So there are the three sample letters. Did you catch the theme in each? Step one: investigate. Step two: invest but only if Step one worked out to your satisfaction.

Photo ©iStockphoto.com/ Feng Yu

READ OTHER COLUMNS BY DALE GOLDHAWK

Goldhawk Fights Back: It’s Fraud Awareness Month in Canada

Goldhawk Fights Back: Telephone scammers are targeting Zoomers

Goldhawk Fights Back: Government not tough enough on fraud

Gemini award nominee, journalist and broadcaster, Dale Goldhawk has earned Canada’s trust by his four decades of work exposing fraud and greed in the marketplace. To read more of his articles, go to www.Goldhawk.com (now part of the ZoomerMedia family of websites).

Don’t miss Goldhawk Fights Back , on the New AM740 Monday to Friday from 10 a.m. until 1 p.m.