Aug. 30, 2018 (Courtesy of Citynews.ca) – Stores including pharmacy chain Rexall have started posting warnings about scams involving gift cards as reports about the fraud continue to mount.
Fraudsters pretending to be the Canada Revenue Agency (CRA) have been calling unwitting consumers and telling them they owe money from a past tax return. The consumers are told they will incur additional fees, face jail time or be deported if they fail to pay the sum — by wire transfer, pre-paid credit cards, gift cards or bitcoin.
“It’s one of the biggest scams out there right now,” said Jessica Gunson of the Canadian Anti-Fraud Centre (CAFC), a federal agency jointly managed by the RCMP, the Competition Bureau, and the OPP.
“These scammers are very threatening. They’re very direct. They entice that fear. They just want that person to have that knee-jerk reaction. They don’t want to give them time to think about it. They don’t want them to talk to anyone else.”
When scammers receive gift cards, they generally resell them for cheaper, Gunson said. They may sell a $100 iTunes gift card for $80, for example.
In October 2016, investigators traced the fraudsters to call centres in India, arresting dozens.
Almost immediately, the CAFC noticed a “huge decrease” in calls about the CRA extortion scam. Since that time, however, the reports have steadily increased.
Last year, the agency received more than 10,000 complaints about that particular fraud, and 688 people reported being swindled out of $2.7 million. But already in the first six months of this year, the number of reported victims has surpassed the 2017 total. The CAFC said 764 victims of the extortion scam handed over $3.6 million to fraudsters from January to June.
The real number is likely much higher as it’s estimated less than five per cent of fraud is reported to the CAFC.
Gunson said she has seen convenience stores and pharmacies in Ontario taking preventive measures.
“Retailers have become very good and very vigilant in alerting customers that may be buying or asking for a stack of cards,” she said.
In April 2016, the manager of a Metro grocery store in Brampton intervened when a man tried to buy 42 iTunes gift cards at once. The manager called police who, after assessing the situation, told the man he was being scammed.
Deborah McCoy – Is an investigative journalist and has over 17 years of investigation experience in both the private and public business sectors. Since joining CFN, Ms. McCoy has become a true advocate for victims of fraud and increasing the public’s awareness in fraud prevention.