Industry threatened by cross-border fraud

Scam artists - increasingly basing their operations in Canada - are making life ever more difficult for legitimate telemarketers and direct marketers, say authorities, who are hoping the industries can come together to educate consumers and slow the trend.

Scam artists – increasingly basing their operations in Canada – are making life ever more difficult for legitimate telemarketers and direct marketers, say authorities, who are hoping the industries can come together to educate consumers and slow the trend.

‘Canada is a haven for telemarketing crime and it’s not going away. The problem is getting worse – even though we have more resources committed to going after them tactically in Montreal, Toronto and Vancouver,’ says Detective Barry Elliott, co-ordinator of the Ontario Provincial Police’s Phonebusters, which works in partnership with the RCMP and international authorities.

He ‘conservatively’ estimates there are between 300 and 500 boiler rooms operating coast to coast (many in Ontario) on any given day in Canada. (The Federal Trade Commission announced a sweep of Canadian boiler rooms earlier this summer, which brought about four cases against 21 defendants and the seizure of $6 million in assets.) As Canadian authorities began cracking down with educational programs for consumers in Canada, crooks turned their sights to other markets.

In the past, Phonebusters has run television and radio commercials warning consumers to be wary when dealing with strangers on the phone, and via mail. It is currently running a tongue-in-cheek television public service announcement across Canada targeting telemarketing fraud.

Operations include phony contest and lottery mailings, classic telemarketing frauds, including advance-fee credit card, credit card protection and lottery scams. Most target U.S. and international consumers – often the elderly and retired (victims are less likely to contact authorities if criminals are based in another country).

‘It hurts two industries – honest telemarketers and legitimate mailers. These guys have destroyed a lot of honest businesses because of their tactics, and have made dealing over the phone and through the mail untrustworthy. The consumer is losing faith,’ says Elliott, adding that running reverse, or inbound, campaigns – where the consumer is asked to call in to a toll-free number if they are interested – is not a bad idea. However, he says, the criminals are beginning to do that themselves – running loan scam ads with 1-800 numbers in newspapers, for example.

The way to reduce the number of both consumer and business victims is through consumer education, he says. ‘The industry has to work closely with police and with education and awareness, and to come up with things that may make it easier for the consumer to know who they’re dealing with.’ BJ