From grandparent scams to roofing cons: Why 2023 is set to be another year of fraud

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Fraudsters have “never had so many tools available to them that they have now,” expert Vanessa Iafolla says.

“It’s a bit of a game of whack-a-mole these days.”

That’s how one expert in financial crimes and fraud describes today’s fraud landscape.

The grandparent scam. Romance scams. Gift card scams. Roofing and other home maintenance scams. Every day, fraudsters are attempting to get money out of people — whether it’s through a phishing link or tugging at their heart strings by leading them to believe a loved one is in trouble. As of March 31, more than $130 million had already been lost to fraud in just the year’s first quarter, according to the Canadian Anti-Fraud Centre. That’s compared to $165 million in all of 2020, and roughly on pace to match last year’s $531 million. And that’s just the cases that have been reported to authorities.

Here are some of the top scams police are investigating:

Grandparent scam or emergency scam

In this popular scam, the fraudster will call someone pretending to be their grandchild or another relative or calling on behalf of the relative and ask for money for an emergency situation.

How it works: The scammer will call people and when they pick up say something like “Grandma” or “Grandpa,” hoping the person who picked up the phone is a grandparent. The scammer will say they need to pay bail money after being arrested, or a lawyer or hospital fees, etc. The scammer may also say they are calling on behalf of a loved one. They’ll say the money is needed urgently, for example, to avoid going to jail or to get out of jail. According to the CAFC, fraudsters will also try and conduct this scam over email or text. If the victim agrees to pay the money, the fraudster will arrange an in-person pick up or will ask for money in the mail.

How to protect yourself: Experts say to hang up the phone, and find the phone number for your local police station instead and call them to see if it’s legitimate. Don’t call any numbers provided by the potential scammer.

How to protect yourself: Experts say to hang up the phone, and find the phone number for your local police station instead and call them to see if it’s legitimate. Don’t call any numbers provided by the potential scammer.

How to protect yourself: Do your research, experts advise. And be wary of unsolicited offers. Experts suggest asking for a contract or a phone number for the company to see if it’s legitimate or not. You can also ask for references or look the company up on the Better Business Bureau.

Gift card scam

In this scam-within-a-scam, a fraudster may pose as a government official, tech support, or a business and say they need to be paid in gift cards, according to the Better Business Bureau. Fraudsters trying to scam people through a romance or grandparent scam may also ask for gift cards as payment. If the victim agrees, they’ll pay for the gift cards and then provide the scammer with the number on the back of the cards.

Canadian police have also warned about another variation of this scam, which involves the fraudster posing as a boss and emailing their employee, asking them to purchase hundreds of dollars worth of gift cards in smaller denominations for personal or business reasons, saying they are too busy to do so themselves. The employee purchases the gift card and then, upon the boss’s (scammer) request, send photos and codes of the gift cards to a different email address. Police explain the fraudsters gain access to the email account of an executive or supervisor and then target an employee who has authority to access and transfer funds. This scam can be more common during the holiday season.

How to protect yourself: Police advise double checking with executives if you get a request like this one. Find a different way to contact your boss, don’t use the contact information in the email or respond to the email.

How evolving technology is changing fraud

Vanessa Iafolla is a criminology instructor at Wilfrid Laurier University and became interested in financial crime when she worked as a bank teller. Now, in addition to her teaching job, she also works as a private consultant.

She says technology has really changed how fraudsters operate.

“They’ve never had so many tools available to them that they have now,” Iafolla said.

Some people may think they’ll never be duped by a scam but it’s not always that simple — people who may not fall for one scam could fall for another. Regardless of the type of fraud, Iafolla said.

In Toronto, Det. David Coffey said common scams that have crossed his and his colleagues desks recently include roofing, rental and grandparent scams — where the fraudster calls the victim and claims to be their grandchild or a relative in need of urgent funds after being jailed for committing a crime.

Coffey said scammers claiming to be someone’s relative usually use the excuse of having a cold, the connection being bad, or during COVID — they would say they were wearing a mask — to explain why their voice may not sound exactly like the victim’s relative.

One recent scam of this nature involved a 78-year-old victim picking up the phone to an alleged fraudster claiming to be their daughter who had hit a young boy with her car and needed bail money.

The common thread in all these scams is urgency. “They need the money and they need it now,” Coffey said, noting that this urgency should be a red flag to potential victims.

Det.-Const. Chris Allan with Peel Police’s fraud bureau said police there have also seen many recent grandparent scam cases. Allan added if someone does get a call from their relative or someone claiming to be a lawyer or police officer, they should hang up and call police to see if it’s true or not.

“We get the phone calls here and after speaking with them for a couple minutes, you quickly realize that it’s definitely a fraud,” Allan said, adding police wouldn’t send a courier to someone’s house to pick up cash — which is how these scams operate.

In Peel, Allan said he personally also sees a lot of romance scams as well as contractor, rental scams and peer-to-peer marketplace scams.

Though both Allan and Coffey say they haven’t seen cases like it yet, there is concern fraudsters could use artificial intelligence to make scams more believable.

As reported by CBC, a woman in Newfoundland lost $58,350 to alleged scammers after she received a phone call from what sounded like her panicked grandson saying he had been in a car accident and arrested. The fake grandson said police found drugs in the car and someone was hurt in the crash, then the phone was handed to a “police offer” who instructed her how to post bail — all possible because technology has made it easier to clone someone’s voice.

What can we do about it?

Experts say the two best defences to scam are keeping an eye out for urgent requests and using common sense.

“Common sense is the best weapon against frauds. You just have to be wary and you have to use your common sense and just take a couple steps,” Coffey said.

Allan warns to beware of people asking for money in urgent situations — especially if they say they’re a police officer or a government official and if they are asking for payment in bitcoin or gift cards — “No government agency asks for bitcoin or gift cards.”

As for construction scams, Allan said to beware of contractors asking for upfront fees and to look into references from a company.

“Don’t just jump right into a business relationship with somebody you don’t know anything about. Check them out on the Better Business Bureau,” Allan added.

Iafolla says it may be time to start having more general conversations with family and friends about fraud and money. Similarly to how some parents talk to their kids about a “safe word” if a stranger ever offers to pick them up somewhere, it could be wise to have a safe word or phrase if someone ever gets a phone call that sounds like a relative asking for money.

Another way to protect yourself could be asking the person on the other line, who sounds like your relative or someone you know, questions only they would know the answer to such as “what was your childhood pet’s name?” or “What’s your mom’s maiden name” — the same type of verification questions we answer online for banking or tax purposes.

Iafolla also hopes that Canadian Financial Crime Agency, an election promise from the Liberal government, will have authority and resources needed to tackle the problem.

“I want that agency to have money and longevity to do what it needs to do protect Canadians,” Iafolla said.

To deal with the rise in cases, Toronto police have recently changed how they investigate fraud cases. Previously, the case would be handled in the division where the fraud occurred but now it will be sent to a central location in the financial crimes before going back to the divisions.

Coffey said this allows investigators to see trends more efficiently and effectively. “Criminals adapt. We’re doing our best to adapt as well,” he said.

This article was originally sourced from