Nigerian Letter Scam

Fraud artists are cleaning up as a battered economy is the prime picking time for scams. Shady offers, once easily dismissed as a scam, are now popping up all over Canada and the number of victims is growing rapidly. Recessions are considered a booming time for the fraudsters as desperate Canadians are falling into traps that offer quick and easy cash by phone, mail and online.

Phonebusters, the Canadian anti-fraud call centre (run by the RCMP), the Competition Bureau and the O.P.P have released statistics showing that Canadians are falling for a ranging variety of scams during this recession. All offices have stated that Canadians are vulnerable and lowering their defences during tough times, in turn, making bad decisions that they normally wouldn’t make. New scams have arised with promises of employment as part of the scams. Other scams that had disappeared as the public gained knowledge are now making a comeback. These scams include the lottery scam and especially the Nigerian letter scam.

The Nigerian letter scam offers a too good to be true promise of sometimes millions in exchange for some minor help with banking transactions. This is offered through a letter, usually in broken English with grammatical errors. On average 10 Canadians month are still falling for this scam and are being milked for hundreds of thousands of dollars. In June, 4 people reported losses of almost $73 000 and in May, 11 people reported being scammed with a loss of $571 000. These losses are considered small in comparison to the losses from mass marketing fraud, identity theft and telephone scams. Most of these scams include offers for investment opportunities, inheritance claims, prizes and lottery winnings.

With more than 1000 Canadians contacting Phonebusters every month in regards to identity theft and roughly 6 700 complaints this year, there has been a total loss of over $5.2 Million from identity theft alone. Last year saw more than 11 000 cases reported by victims and losses surpassing $9.6 Million. These numbers are not as accurate as you think with most people that are taken for less than $100 not even reporting their crimes. If you take that number of 11 000 and multiply it by 10, you would get a closer estimation as to how many people are actually victimized each year. If you’ve been scammed, contact your local authorities immediately regardless of the amount.

How can you prevent it?

Call your local securities commission to check if the person is regulated and registered.
If you feel that someone is rushing you or pressuring you, be weary.
Do your research on the person and the investment before you come to a decision.
Protect your equity with a knowledged Toronto mortgage Broker

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Nigerian Letter Scam

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Nigerian Letter Scam

Forex Scam or Foreign Exchange Scam

This scam will offer, what seems to be a legitimate, exciting new opportunity to invest in the foreign exchange market. The sale of the scheme seems legitimized through courses in trading or software that you can use. Your money is never actually invested but instead stolen by the con artist.

This scam is usually offered through ads in newspapers, radio, T.V or websites, giving you a feel that it may be safe. The ads always look legitimate and offer you an opportunity to invest in the foreign exchange market (forex).

They may also offer for you to buy software or sign up for trading classes.
As I stated earlier, your money is never invested but simply stolen. If it is actually invested, it was invested in something risky and you were never told of the risk which will leave you with only a little or none of your money.

Foreign exchange trading is run by large international banks with superior trained staff who have access to the best technology and million dollar trading accounts. It’s almost impossible to consistently beat these trained professionals at their own game.

How can you prevent it?
Call your local securities commission to check if the person is regulated and registered.
If you feel that someone is rushing you or pressuring you, be weary.
Do your research on the person and the investment before you come to a decision.
Protect your equity with a Toronto mortgage Broker

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Forex Scam or Foreign Exchange Scam

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Forex Scam or Foreign Exchange Scam

The Offshore Investment Scam

These are scams involving high return investments. This begins with someone approaching you to come see an investment seminar. These scammers will target anyone and everyone. It may even be someone you know who was just invited to the seminar.

At the seminar your promised huge rewards with low risk by investing in the offshore markets. There may be people at the seminar testifying that they have gained already from the investment. They will state great returns of 13% – 20% return on their investment in a short period of time. They will also state that the major Canadian banks invest in these to gain capital themselves.

Watch out, you know what they say, if it’s too good to be true …… exactly. Once the money is in their control it becomes impossible to track and get back.

The general theory behind lending money is the higher the risk, the higher the interest or rate of return. The more risk, the greater the chances are that you will loose your money.

How can you prevent it?
Don’t send your money out of province. The minute the money leaves the province, you’ve lost any protections provided by Ontario law. Scams usually involve an offshore institution so that it is difficult to trace the transactions.

Research the person. The guarantee you receive from someone is only as good as that person or the company making the guarantee. Research your investment opportunity and the registration of the company and person providing the investment
Watch for promises of high return and low risk. Have your financial advisor, accountant or lawyer evaluate any investment opportunity you are offered and not sure about.

Protect the equity in your Toronto mortgage
Ontario Securities Commission Contact Centre 1-877-785-1555

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Offshore Investment Scam

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Offshore Investment Scam

Double-Dipping

This scam is a mix of boiler room and what’s called the double dip scheme.

This starts out the same way as a boiler room where you are contacted about an opportunity too good to be true. Once the initial scam takes place, you are contacted again, for a charge to get your rewards. In other words, double-dipping, as they say.

The scammer will contact you, most likely from another jurisdiction other than your own, and offer an investment opportunity for a company that is about to go public. They will go on further to say that if you were to commit now, that there could be larger cash returns after the Initial Public Offering (IPO). They will try to use a company name that sounds familiar but usually they do not work for that organization or they use a name that is a variation of the real companies name.

The scammer will then instruct the investor to wire the money or send a money order to a specified address. Once the scammers have their money they will send you a fake certificate for confirmation of the investment and you probably won’t hear from them again. The scammer will then sell your information to another con artist who will contact you down the road to tell you your investment has made money and it’s time to sell. Knowing that you have been waiting to hear from them for a long time, they ask you send another money order for a processing fee or tax so that they can complete the transaction.

In these types of scams, the money is sent through various jurisdictions so that it can create extra confusion to track down the thiefs. This leaves the victims in confusion as to which jurisdiction to contact in order to file a report.

How can you prevent it?

Call your local securities commission to check if the person is regulated.
If you feel that someone is rushing you or pressuring you, be weary.
Do your research on the person and the investment before you make a decision. Most investments don’t vanish overnight.
Protect the equity in your Toronto mortgage

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The Double-Dip Scam

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The Double-Dip Scam

Affinity Fraud

Affinity fraud is referred to as a fraud amongst friends. The scammer will target religious, ethnic, culture, or career and interest groups. He then joins the group and gains the trust of their most respected members. He will gradually build a bond with these group members so that he can have an influence or an “affinity” with the group. Once he has gained a respected member’s confidence he is introduced to others and as credibility is built he bilks the group.

These professional fraudsters know how to build trust. Once they gain the trust of the group the scammer will begin to speak to the upper most prominent members of the group about a few investments that are making him good money. He will explain it in such an in depth way that it will begin to sound like it’s a low risk or even guaranteed. It may be in the form of property or off shore investments, whatever it is, if it sounds too good to be true, it usually is.

Once he can say that these key group members are buying into the investment he has everyone right where he wants them. If the scammer can gain the trust of a few key members in this group, he can usually gain the trust of almost anyone in the group.

The actual fraud taking place is a pyramid scheme where the scammer will use money from new investors to pay the earlier investors to gain further trust from the new investors. Once they hear that the first group of investors have made money, and they will tell everyone in the group, word will spread and everyone will be buying into the investment.

Once people stop buying or the scammer reaches the goal he has set for himself, he disappears with everyone’s money. These fraudsters are usually never heard from again and are difficult to find.

The saddest part to this article is that in most cases the authorities are never contacted. The people are too embarrassed to admit that they were scammed and in most cases they try to work things out within the group. If you feel that you have been a victim of any investment schemes you should contact your local securities commission. If you don’t take a stand they will move on and they will do it to someone else.

How can you prevent it?

Call your local securities commission to check if the person is regulated and that the investment itself is regulated and registered.
If you feel that someone is rushing you or pressuring you, be weary.
Do your research on the person and the investment before you make a decision. Most investments don’t vanish overnight.
Protect the equity in your Toronto mortgage

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Affinity Fraud Scams

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Affinity Fraud Scams

Boiler Rooms

This type of scams starting point is an unsolicited phone call, to you, to buy shares in a private company that is about to be listed on a major stock exchange. The scammer will state that, once the company goes public, the value of its shares will skyrocket. This company is usually in a sector that’s in the news at the present time. At this time, many of these scams focus on the latest environmentally friendly product or alternative medicine.

The real catch is that the company does not exist. By the time you realize that you’ve been taken advantage of, the scammer will have closed up shop and moved on to another scam. Unfortunately the chances are likely that you will never see your money again.

This specific scam is usually pulled off by a team of scam artists who set up a makeshift office known as a “boiler room.” In order to convince you that the company is real, they will send you to the company’s website to check things out. They may also set up a toll-free number and a business address to create the appearance that the company is legitimate. Be careful because everything on the site could be fake. The toll-free number will go right back to the scam artist, and the address is usually a post office box or temporary office address.

Today’s scammers, see that investors are paying increasing attention to overseas investment opportunities and have created a new generation of scams that have gone international. The most troubling thing about this is a growing pattern of former U.S. boiler room operators who have moved their telephone sales operations outside of the U.S. and Canada to the Bahamas, Panama, Costa Rica, Hong Kong, and even South Africa.

These locations for the boiler rooms are carefully chosen. These scammers are now dialing out of countries that may have no extradition arrangements with North American law enforcement agencies so be careful.

How can you prevent it?

Get the name and phone number of the company for any place that solicits you directly that you are not familiar with.
Check to see if the company is registered with a trade board or commission.
Go to Google or Yahoo answers to do some research in the company before investing. In most cases someone will have posted a blog or two on the company and check out the blog to make sure it’s not someone working in the company.
If your not sure, it’s not something you want to take the chance investing in.
Protect the equity in your Toronto mortgage

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Boiler Room Scams

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Boiler Room Scams

The Financial Services Commission of Ontario otherwise known as FSCO has stepped up again doing an audit of all brokers in Ontario. During this audit they derived that 79 Brokers and Brokerages were functioning without the mandatory errors and omissions insurance. This insurance is required to cover acts of negligent behavior, or errors made accidentally. This insurance not only protects the broker but also protects the clients so that the error that was made can be rectified no matter what the cost.

Insurance is mandatory as of the effect of new legislation that took place in June of last year with audits starting early of this year. I myself, am enthused by FSCO’s move. Kudo’s to them for helping clear out the brokerages that don’t play by the rules. Although the cost of insurance is high, there is no reason that any brokerage should function without it. That is part of the cost of doing business.

On top of the proposal to revoke the licenses of all brokerages listed in the 79 suspensions, everyone that is listed has been imposed a monetary fine of $1000.

Although most of today’s brokers are compliant with FSCO’s regulations, be prepared to see numerous changes in the mortgage industry in the near future and more brokers losing their licenses. Some of the new changes that you should see:

- Changes to advertisements (cannot say your the best without proof)
- Changes to the way rates are presented (no more teaser rates in papers)
(cannot state “best rate”)
- Must show brokerages license and personal license number on everything
- Cannot provide any misleading or deceptive information or representation
This includes but is not limited to

i) Intentional misrepresentation
ii) Improper use of disclaimers
iii) Improper reliance on industry terms
iv) Incomplete comparative ads
v) Implied endorsements
vi) Improper use of teasers
vii) Use of unsubstantiated exaggeration
viii) Lack of timely reviews of advertisements

- Broker must show cost to break Toronto mortgage and any other fee’s involved or that may be incurred

If you find a broker not complying with any of the above noted changes contact FSCO and let them know. Please help us seed out all the brokers giving us a bad name in this industry.

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FSCO Has Suspended 79 Brokers – News Week Ending Feb27/09

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FSCO Has Suspended 79 Brokers – News Week Ending Feb27/09