The most profitable kind of fraud does not involve technology, which requires extensive knowledge of computers and too much preparation for a success rate of almost nil.
Instead, the fraud with the biggest payoff is of a social nature, manipulating victims instead of computer systems. Thieves gain their target’s confidence and manipulate them into doing things they would not normally do.
With the exception of phishing or credit and debit card fraud (skimming), these are the main scams occurring today. Though they are not directly linked to the financial world, it is best to be aware of them so you can better protect yourself.
Pay to get credit
Some companies say they will give you credit even if you have a bad credit rating. They usually request an up-front fee, which may range from hundreds to thousands of dollars. Once you send your money to these companies, you never get your promised loan and you cannot get your money back. In most provinces and territories, it is illegal for a company to request an up front fee prior to obtaining a loan.
An exotic business opportunity
A scam known as a Letter Scam also claims many victims. It begins when a victim receives an urgent and confidential e-mail from a well-connected person making a business proposition. He may claim to have recently come into some wealth or inherited a family fortune and that he is looking for a foreign partner to help claim these assets.
He explains that his position prohibits him from opening a foreign bank account and asks victims to deposit the money (often between $25 and $50 million) into their account in exchange for a certain percentage. To complete the transfer, the scammer requests personal financial information (name of your financial institution, telephone and fax number, account number, etc.).
The outcome is simple: as a test, the scammer transfers several thousand dollars into the victims’ accounts and asks victims to send back a portion into his home account. A few weeks later, victims learn that the initial payment they received was without funds, while the money they transferred into the scammer’s account cannot be recovered from an international perspective.
Phony job offers
Be wary of sites that post application forms that require personal information (name, social insurance number, date of birth, address, phone number, etc.). Fraud artists post tempting job offers using the names of prestigious companies.
Classified ads also sometimes disguise pyramid schemes as legitimate job offers. Be careful! Pyramid schemes are illegal under The Competition Act and you could be prosecuted.
The Prize Pitch
A common scam is the Prize Pitch where consumers are told they have won a great prize like money or a car. To claim the prize, they have to buy a product (pens, knives, etc.) and pay in advance. Remember that legitimate contests don’t require winners to make any kind of up-front payment in order to claim their prize.
After entering a fake sweepstakes contest, you will be told that you have won a large cash award, but money must be sent up front for taxes. This person will usually identify themselves as a lawyer, judge, customs agent or other official.