Baranyai: Education best tool in combatting fraud

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At the turn of the last century, George Parker famously “sold” the Brooklyn Bridge to dozens of newcomers, promising each one they could earn money collecting tolls on a bridge that was never his to sell. When he was arrested in 1908, Parker snagged a sheriff’s hat and overcoat from the courthouse and confidently strolled out past the guards, wishing them a Happy New Year.

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Confidence scams are as old as money itself. Their sophistication and reach has only increased in the digital age.

In particular, investment and romance scams are on the rise, warns the Canadian Anti-Fraud Centre (CAFC). Victims are often enticed to invest in cryptocurrency, which makes the money particularly hard to recover. Last year, reported fraud losses across Canada topped $554 million.

Worse, only five to 10 per cent of victims actually report the crime, says John Armit, Acting Detective Sergeant with the OPP Anti-Rackets Branch. “If the estimates are correct, Canadians are losing billions of dollars a year.”

Armit is on secondment to CAFC, which collects information on fraud and identity theft. He specializes in crypto scams but notes low-tech fraud also wreaks havoc, often targeting seniors, who are 33 per cent more likely to be victimized. It is infuriating.

Recently, a dear friend in his eighties bought some garden equipment. Weeks later, he got a call from someone who knew what he’d purchased, when and where he’d bought it, and for how much. So, when they said he had been selected to win a big cash prize, he believed it was a legitimate promotion. All he had to do was pay the tax up front. Next, the caller demanded money for delivery.

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As frauds become apparent, seniors are less likely to report them, Armit says, fearing their children may think them not competent to handle their own finances. They’re also more likely to be bilked repeatedly. “They start throwing bad money after what they think is good money,” Armit says. “Sometimes these scams can go on for a year.” He adds the idea of a random prize may not seem suspicious to a generation who grew up watching Ed McMahon startle people at their front door with balloons and a cheque from the Publishers Clearing House Sweepstakes.

Unsolicited calls, emails or text messages are red flags, even if the person knows your name. Scammers can access names from a simple 411 search on a landline, or a data breach. “You can buy a person’s full information on the dark net for about $8,” Armit says.

The emergency grandparent scam is another tactic chiefly targeting seniors. It is devastatingly persuasive. Friends of mine got a call attesting their son was in a car accident and being charged; he urgently required bail money. In the throes of adrenaline, they believed the tearful young man to whom they briefly spoke was, in fact, their son. Fortunately, they visited the OPP to see about the charges.

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This past April, Project Sharp made 14 arrests in Montreal, busting up a grandparent scam. During four months, fraudsters with ties to organized crime had stolen $739,000 from 126 victims.

Such arrests are important victories, but Armit admits the sheer volume of scams makes for difficult work. Each has multiple players, with scripts to follow, intermediaries and money mules. Many scams originate abroad. “If we can arrest and share the information overseas, maybe we can take down a cell, but it’s like whack-a-mole.” Their greatest crime-fighting tool, Armit says, is fraud prevention.

Unlike selling the Brooklyn Bridge, there are no lone bad actors. “Every fraud is an organized crime,” he says.

write.robin@baranyai.ca

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