I received the phone call the other day, the same one you probably get every couple of months/years/weeks. The one that asks, did you spend $4500 on a Turkish carpet at Carpetmania, many miles from where you live?
Speaking with Cherise, the helpful credit-card rep, I realized it had been a few years since one of my cards was scammed (only paying subscribers receive my PIN number), and that time it was by someone who had purchased a MacBook Pro online and arranged to pick it up at a mall not too far from me. The Apple store even had video of the person who came to pick it up, and yet the charge went on my card and the MacBook vanished. Eventually, my card was refunded, although I had to return the points (waaah).
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BUT WAIT! The scammer walked away with the machine even though she wouldn’t have had any identification to show she was the cardholder, i.e., me? They had video of her?? The good — albeit unconfirmed — news I heard from Apple was that they have ways (rubbing hands in Scrooge-like glee) of disabling the machine remotely, so she would get no satisfaction from it unless, of course, she had an ex-Apple tech buddy who could reverse those moves. Or she could sell the connectivity-free machine for half-price online to some unsuspecting rube who sees a brand-new machine, with the original packaging and thinks, SCORE!!!!
And so it goes. As my clients at the BC Securities Commission always say, if something looks too good to be true, it probably is, and that goes for investments, purchases and special offers.
My most recent brush with the world of scammery was all online purchases, only one of which went through before the bank’s algorithm kicked in and stopped the next raft.
Ms. Piros, did you purchase $658 of perfume online?
No.
Did you purchase a $1,000 Air Canada gift card?
Hell, no. (What kind of a cruel gift would that be?)
Did you purchase $672 sunglasses?
I wish.
Did you make a $9.35 purchase at HardWare City online?
No. Wait, what?
The hardware charge went through, but will be investigated and likely refunded to me within 10 to 20 days.
All this made me curious as to what happens behind the scenes. How do they know I didn’t buy a cheap wire-crimper, even if I say I didn’t? When someone scams my card for an online purchase, they must pick it up somewhere, right? I don’t see anyone lurking around my front door, waiting to intercept an Air Canada gift-card. So where do they ask for the loot to be sent? Even postal boxes have owners who pay to own them.
I reached out to the Canadian Anti-Fraud Centre, where I learned my scammers are likely not interested in obtaining the online purchases at all, but more likely in leveraging them to get cash back from a fraudulent claim that their order didn’t arrive. Oh, and they’d like to be refunded to a different credit card.
Lisanne Roy Beauchamp from the Canadian Anti-Fraud Centre says they may have used a PO box purchased with sophisticated fake ID and another stolen credit card, or they may have used the address of an empty or abandoned house. Perhaps they scammed someone into accepting a parcel delivery. And sometimes they do actually hide in the bushes and wait until they can let their porch-pirate flag fly, snatching the delivery from your front door. The possibilities are staggering.
And you have to also be wary of those monthly automatic charges from your gym, your phone provider, your streaming service. Lisanne says, “Anywhere you leave breadcrumbs, they can get picked up. For subscriptions, your information is only as safe as their gathering & storage systems are. Beyond their actual systems, policies and procedures to protect their client's information, it only takes one employee to click a link in a fraudulent email setup with malware to then gain access to any connected systems.”
Starting to see a pattern here? For every technological security measure that’s added to our online activity (27-factor verification, anyone?) and banking safeguards, the scammers have their own tech folks to find a way around them. Make no mistake, the guy who scanned your credit card with a card-skimmer or took a photo of it while it lay on your restaurant table is not the criminal mastermind behind the network; that creep is just a small cog in a very big wheel of organized crime. Trying to hunt these players down around the world is like chasing a ghost in a foggy graveyard. The international complexity explains why, although there are homegrown scammers here in Canada, most victimize those in other countries because it’s to their advantage to do so.
It’s a crime that goes largely unsolved and unpunished, although some of the bigger-dollar frauds do get intercepted and some of the money is returned — sometimes. It’s a very tiny light in the darkness, and one of the heroes on that front is Toronto Detective Constable Micheal Lane; here’s how his department describes a win.
Lane was part of Project Friends, which was created to investigate a large organized group that is alleged to have conspired to defraud Canadian banks of millions of dollars.
They are alleged to have used internal bank employees to create accounts, synthetic identities, credit cards, lines of credit and financing for high-end motor vehicles.
Shell companies were used to transfer fraudulently obtained motor vehicles into the company name to avoid detection from the financing companies. Some of the vehicles were shipped out of the country.
A total of 46 vehicles were identified as being obtained by fraud and eight search warrants were executed. The 20 vehicles recovered were estimated to be worth $1.3 million.
A 9mm Sauer firearm was also seized and a bitcoin mining farm was dismantled.
Police have made seven arrests and filed 23 charges.
I spoke with DC Lane, who was incredibly helpful and informative. First, here’s important advice: it may be a huge pain in the ass to manually enter your credit-card information every time you order a string of lights on Amazon, but Lane says to NEVER allow websites to save your payment-card information. He goes so far as to recommend not allowing Google, etc. to save your passwords, but my body is overcome by shudders at the thought of pressing “delete all” and having to find and enter them every single time.
Here’s another of his suggestions to keep yourself somewhat protected:
Our reliance on the convenience of online transactions and interactions make us vulnerable to shitty actors working for legitimate businesses and third parties who purchase our information from them. You might not notice a $5 charge on your credit-card statement, but it could be someone fishing to legitimize the card number, which is then aggregated with others and sold on the dark web, sometimes for under 10 cents a card! Lane says cards are most valuable when they have been freshly stolen, legitimized by a small charge that you might not even notice and your bank’s algorithm won’t flag.
Which explains that $9.35 hardware charge that slipped through on my Visa card!!!!!! And don’t forget how much authorizing information you willingly post online — things like your phone number, your address, your pet’s name. These are all doors left ajar.
While in Toronto recently, I met Dianne Couples, CEO of Portfolio+, a Canadian company which envisions an open banking ecosystem for data-driven, personalized banking and financial services. So I asked her about the security of our online money and identity.
While everyone works very hard to have everything completely secure, in today’s technology, there is always some degree of risk…outside of employees, there are bad actors who:
* make phone calls to individuals posing as a representative of the card issuing company and scare employees that their card has been compromised and then uses their answers to questions to gather their personal information which they then use to steal their identity or create a cloned card.
* Set up websites that grab your attention, you fill in the questionnaire but to get the information or report you must give them a credit card which they then steal and use for their own purposes as you have filled in your information
Public wifi is very unsecured and easy for people get their payment information intercepted.
Dianne also recommended a few good articles where you can learn more about credit card scams. Here, and here, and also here.
For goodness sakes, change your router password when your provider delivers it. Lane says it’s astounding that some people stick with the manufacturer’s default. You might as well leave your car running, keys in the ignition, and your wallet on the front seat, along with your passport and birth certificate.
Be wary of tapping your card at gas stations at night. Those places are usually staffed by one person in the booth, without clear sightlines in the dark, allowing scammers to install card-skimmer overlays on the pumps and steal your card information neatly and efficiently.
You likely know someone who needs this information. This post is public so feel free to share it.
Lane introduced me to a couple other interesting terms, like “synthetic identities”. In his case against the fraud ring, he came across 58 different synthetic identities (fake identities manufactured with the cooperation of shady bank employees to be used as financial instruments at banks).
He also notes that time and privacy legislation work against law enforcement when it comes to stopping the scammers and getting your money back.
I'm only going to talk for Toronto, but I'm sure it applies across the board, across Canada. We're very limited in the amount of time we can spend. In our office, we get 18 to 20,000 occurrences every year. So they range from, I would say, simple cheque fraud to organized crime that involves cryptocurrency. The anonymous nature of that makes it very difficult for an investigator to get information.
Usually, law enforcement is roughly about six months behind the criminal enterprises, so six months could mean the deletion of, say, an IP address which could be a link to tell us where some of the funds went.
There are a lot of privacy issues, especially in Canada and in our banking system. So for instance, if I get a complaint that you clicked on a link and next thing your money is gone, and even if you know this bank account and I know it’s fraud, yet when I want to get the other information for the bank account to follow up on who it is, I have to write a what's called the production order — technically, a search warrant — and that could take upwards of six months to work through the process.”
Once Lane has the search-warrant equivalent, he must convince a justice of the peace to agree that he has grounds, and get it signed. When he delivers the warrant to the bank, which is already inundated with warrants, and the three analysts it employs to deal with them are up to their ears, even a simple case can take months.
Most of us, when we get the credit-card call, are satisfied when we receive compensation. Inevitably, a new card with a new number is issued and we think that’s the end of it, but it’s important to report scams to the Anti-Fraud Centre, which is the hub that track trends, geographic activity and law-enforcement efforts across multiple jurisdictions. If you report that your credit card was compromised at a particular store or restaurant, that helps the centre in what Lisanne refers to as “disrupting the scammer” and the scamming tools.
And be aware that different banks and financial institutions have different thresholds below which they do not turn your case over to the police. I tried to get more specific information on that, but the Canadian Bankers Association shovelled a steaming pile of PR BS at me instead of answering specific questions. Sorry about that.
While my focus began with credit-card scams, which are most likely to have affected you, there are many others, and reporting them goes a long way to providing better information to educate the public about what to watch for. Don’t forget, people still fall for the old CRA-is-coming-to-your-door-to-arrest-you con, and somehow think Revenue Canada needs an Apple gift card.
Romance scams are among the most common grifts, according to the Canadian Anti‑Fraud Centre, costing Canadians more than $50.3 million in 2023. Lisette says these are the toughest for operations staff, since caller is generally traumatized, highly emotional and ashamed of being duped, often over many years and many interactions and financial blood-lettings. Once again, if it looks too good to be true…..
Today’s musical offering is not exactly on point, but whenever there’s the slimmest excuse to play some Boz Skaggs, I’ma take it. Until next time, keep your cash close and your cards closer!
Until next time, keep your cash close and your cards closer!
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